Federal Trade Commission Proposes New Rule to Simplify Cancellation of Recurring Subscriptions

The Federal Trade Commission (FTC) has proposed a new rule that would make it easier for consumers to cancel recurring subscriptions.

Click to Cancel Will Help Consumers Easily Terminate Subscriptions

The proposed rule, known as the "click to cancel" provision, would require companies to simplify the cancellation process by allowing consumers to terminate services the same way they signed up for them. The proposal also mandates that sellers ask consumers who are canceling their subscriptions if they want to hear about other offers before pitching them, and provide consumers with annual reminders of their subscriptions before automatically renewing them. The FTC receives numerous complaints from consumers every year about being billed for recurring services without their consent or facing difficult cancellation policies. The public will have 60 days to submit comments on the proposal once it is published in the Federal Register.

The proposed rule is part of the FTC's review of the Negative Option Rule, which was passed in 1973 and requires sellers to disclose the terms of sale before consumers subscribe and provide information about how consumers can go about canceling. The finalized rule's effective date is not yet known.

Why it's Important to Protect Users?

Protecting users is important because it ensures that individuals are treated fairly and are not taken advantage of by businesses or other entities. When users are protected, they can trust that the products and services they use are safe, reliable, and of high quality. Additionally, protecting users can help prevent fraud and deceptive practices, which can harm individuals financially and emotionally. By establishing rules and regulations that promote user protection, we can create a more just and equitable society where everyone has the opportunity to thrive without fear of being taken advantage of.

How Companies Can Protect Users By Helping them Cancel Their Subscriptions

Companies can safeguard the safety of users by making it easier for them to cancel their subscriptions. The Federal Trade Commission (FTC) has proposed a rule that would require companies to simplify the cancellation process by allowing consumers to terminate services the same way they signed up for them. This would mean that if a consumer signed up for a subscription online, they could cancel it online too, rather than having to go through the hassle of doing it by phone or in person. Additionally, sellers would be required to ask consumers if they want to hear about other offers before pitching them when they're canceling their subscriptions. They would also need to provide consumers with annual reminders of their subscriptions before automatically renewing them. By making the cancellation process easier and more transparent, companies can help protect users from being billed for recurring services without their consent or dealing with difficult cancellation policies.