The Federal Trade Commission (FTC) in the United States announced on Wednesday a finalized rule that will allow consumers to more easily cancel unwanted subscriptions and memberships.
The FTC announced in a press release on Wednesday that the “click-to-cancel” rule requires sellers to provide convenience to consumers, making the process of cancellation as easy as the registration process.
According to the statement, this final rule will be published in the Federal Register, and most of its provisions will take effect 180 days after publication.
FTC Chair Lina Khan stated, “Often, businesses subject consumers to endless hassles when all consumers want to do is cancel a subscription. The FTC’s rule will put an end to these tricks and traps, saving Americans time and money. No one should be forced to pay for services they no longer need.”
The announcement indicated that the release of this final rule is part of the FTC’s review work, which includes the modernization of the 1973 Negative Option Rule to combat unfair or deceptive practices related to ordering, membership, and other recurring payment schemes in today’s increasingly digital economy where businesses find it easier than ever to sign consumers up for their products and services.
According to a report by NBC News, Khan stated in an interview on Tuesday that the FTC now receives nearly 70 complaints per day related to canceling orders, a number that has seen a “dramatic” increase in recent years. She also mentioned that after the proposed rule was announced, the agency received approximately 16,000 comments, with many complaints about the headache of canceling subscriptions.
“In recent years, we have seen more and more companies making registration extremely easy but making cancellation extremely difficult,” Khan expressed. “As a result, Americans end up paying more money and wasting more time. That’s why we are using this rule to put an end to this phenomenon.”
The FTC’s action is also part of the Biden administration’s efforts to combat “junk fees” for products and services.
Democratic presidential candidate and Vice President Kamala Harris highlighted the “click-to-cancel” proposal last month, stating that if elected, this would be one of the issues she prioritizes solving.