FTC Proposes Rule Change to Make Canceling Subscriptions Easier for Consumers

The Federal Trade Commission (FTC) announced a proposed rule change on Thursday that would make it easier for consumers to cancel recurring subscriptions. The so-called 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. This would mean that if a consumer signed up for a subscription on a website, for example, they would need to be able to cancel it online rather than having to do it by phone or in person.

The proposal would also require sellers to 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 new rule would affect millions of consumers in virtually every aspect of their lives, as subscription-based goods and services have become commonplace in industries as varied as music distribution, digital streaming and e-commerce, cable TV service, traditional print media and more. This includes gym memberships, streaming services, digital products, and more.

The FTC is currently seeking public comment on the proposed rule change. If the rule is approved, it would go into effect in the coming months. The FTC hopes that the new rule will help consumers better manage their subscriptions and avoid unwanted charges.

The proposed rule change is part of the FTC’s ongoing efforts to protect consumers and ensure that they have the information they need to make informed decisions. The FTC is encouraging consumers to submit their comments on the proposed rule change before the comment period ends on August 14, 2020.