The ‘click-to-cancel’ rule will take effect 180 days after being published|DS Staff
Subscription and membership-based businesses in the US will have to make canceling as easy as signing up. The Federal Trade Commission (FTC) voted 3-2 on Wednesday to approve a proposal to make it easier for consumers to opt out of services.
The “click-to-cancel” rule will take effect 180 days after being published.
The FTC notes it receives about 70 complaints each day regarding hard-to-cancel or unnoticed subscriptions. The number was 42 in 2021.
The new regulation protects consumers from unnecessary charges and misleading practices, saving them time and money. It prohibits businesses from:
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Making false claims when marketing subscriptions.
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Hiding important terms related to billing.
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Charging consumers without their explicit consent.
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Making cancellations difficult by including unnecessary steps.
While the White House supports the rule as part of a broader effort to lower consumer costs, the US Chamber of Commerce opposes it. It claims the changes will raise costs for consumers and that the FTC is trying to “micromanage business decisions.”
Some business groups, including publishers and advertisers, have also opposed it, arguing it is unnecessary. They say states already regulate cancellations.
The new FTC law gives it more power to penalize companies. The agency has cracked down on multiple big corporations in the past year.
It sued Amazon in 2023, accusing it of deliberately increasing customer hardships in canceling Prime subscriptions.