“Click to Cancel,” proposal to make canceling subscriptions easier
MOBILE, Ala. (WALA) -Like singer Dua Lipa the Federal Trade Commission’s got some new rules.
Most consumers would agree, canceling free trails and subscriptions isn’t always easy and sometimes it’s a downright hassle. That’s where proposed federal regulations come in.
The proposals would ban companies from trying to retain customers through deceptive or burdensome tactics. Under the new rules, consumers would be allowed to cancel the same way they signed up. For example, if you booked a gym membership online, you would also be able to cancel that membership online and preferably with one click. In fact, the provision is dubbed “click to cancel.”
“Some businesses too often trick consumers into paying for subscriptions they no longer want or didn’t sign up for in the first place,” said FTC Chair Lina M. Khan in a statement.
The FTC saying it’s looking to save consumers money and time. The current patchwork of laws and regulations available to the FTC do not provide consumers and industry with a consistent legal framework. Accordingly, the proposal would make several specific changes, including implementing:
- A simple cancellation mechanism: If consumers are unable to easily leave any program when they want to, the negative option feature becomes nothing more than a way to continue charging them for products they no longer want. To address this issue, the proposed rule would require businesses to make it at least as easy to cancel a subscription as it was to start it. For example, if you can sign up online, you must be able to cancel on the same website, in the same number of steps.
- New requirements before making additional offers: The proposed rule would allow sellers to pitch additional offers or modifications when a consumer tries to cancel their enrollment. But before making such pitches, sellers must first ask consumers whether they want to hear them. In other words, a seller must take “no” for an answer and upon hearing “no” must immediately implement the cancellation process.
- New requirements regarding reminders and confirmations: The proposed rule would require sellers to provide an annual reminder to consumers enrolled in negative option programs involving anything other than physical goods, before they are automatically renewed.
The rule have not yet been finalized.
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