Click to Cancel: FTC Wants to Make It Easier to Dump Subscriptions
The Federal Trade Commission wants to make it easier to break up with companies.
A proposed federal regulation would require firms offering subscriptions and memberships to make your exit as easy as your entrance. The FTC calls this “click to cancel” rule, introduced today, a remedy to deceptive marketing and “dark pattern” customer experiences that aim to keep customers paying after they’ve lost interest in a recurring service.
As explained in that post and a notice of proposed rulemaking(Opens in a new window), the FTC’s rule would impose three requirements on companies offering subscriptions and memberships:
Canceling must be as easy as signing up. As the release says: “If you can sign up online, you must be able to cancel on the same website, in the same number of steps.”
Before a company can offer “retention” offers to persuade you to stay, it must ask if you want to know about them. “In other words, a seller must take ‘no’ for an answer,” the FTC says.
“Negative option” programs for digital goods—in which the subscription renews automatically unless the customer cancels, something Generation Xers may know best from their days as Columbia House CD club subscribers(Opens in a new window)—would have to give subscribers an annual reminder of their situation before auto-renewing them.
The FTC rulemaking notice estimates that companies subject to this regulation would spend one more hour a year on recordkeeping and two more hours on the disclosure statements now needed, for total added labor costs of $5,689,550.
The Senate proposed tackling this issue in 2021 with the Unsubscribe Act, though it failed to pass. Today, that bill's sponsor, Sen. Brian Schatz (D-HI), said the FTC action "is a good step in the right
Read more on pcmag.com
