The new rule will require businesses to make cancellation processes as straightforward as sign-up procedures, and companies will be prohibited from forcing customers to use chatbots or speak with agents to cancel subscriptions that were originally initiated online or through an app. For memberships started in person, businesses must offer cancellation options by phone or online.
In a statement accompanying the Commission's press release, FTC Chair Lina M. Khan said: "Too often, businesses make people jump through endless hoops just to cancel a subscription. The FTC's rule will end these tricks and traps, saving Americans time and money. Nobody should be stuck paying for a service they no longer want."
The rule will apply to almost all negative option programs across all media. It also requires sellers to provide clear information before obtaining billing details and to secure informed consent for negative option features prior to charging customers.
The move follows a significant increase in consumer complaints about subscription practices, according to the FTC. In 2024, the government agency received an average of nearly 70 complaints per day related to negative option and recurring subscription issues, up from 42 per day in 2021.
The Commission voted 3-2 to approve the final rule, with two Republican commissioners opposing it. Some initially proposed measures were dropped, including requirements for businesses to send annual reminders about recurring charges. The new regulation is set to take effect 180 days after publication in the Federal Register.
The regulation is part of the FTC's efforts to modernize its 1973 Negative Option Rule and address unfair practices, and follows recent legal actions against major companies like Amazon and Adobe over their subscription practices.
Tag: FTC
This article, "FTC 'Click to Cancel' Rule Aims to Make Canceling Subscriptions Easier" first appeared on MacRumors.com
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