The Federal Trade Commission (FTC) has proposed a new “click to cancel” rule designed to help consumers end difficult-to-end free trials, auto-renewals and subscriptions. This is due to an increase in companies using subscription models for recurring income, which can be a financial burden on consumers when businesses make it difficult to terminate services.
The proposed rule would require businesses to make cancelling easy as signing up. It would also require companies to provide an annual reminder to consumers enrolled in negative-option programs involving anything other than physical goods before the subscription is automatically renewed, and to immediately cancel the subscription if the consumer declines any offers or modifications.
The FTC has received 17,400 complaints regarding negative-option violations, and two companies, Vonage and ABCmouse, have settled FTC charges. Comments about the new rule can be filed electronically at Regulations.gov. The FTC will publish a consumer alert once the notice is available.
The new “click to cancel” rule could bring much-needed relief to consumers who find themselves trapped in expensive and difficult-to-terminate services. In simplifying the cancellation process, the FTC is working to ensure that companies are held accountable for their practices and that consumers are empowered to make informed decisions about the services they use.