The government steps in to make it easier to cancel your subscriptions
- The FTC finalized its rule to make canceling subscriptions easier.
- The rule targets "negative option" programs, such as auto-renewing subscriptions.
The government has had it with companies making it difficult for consumers to cancel their subscriptions.
The Federal Trade Commission announced in a press release on Wednesday a final "click-to-cancel" rule that will require companies to make canceling subscriptions just as easy as signing up for them.
"Too often, businesses make people jump through endless hoops just to cancel a subscription," FTC Chair Lina Khan said in the agency's press release. "The FTC's rule will end these tricks and traps, saving Americans time and money. Nobody should be stuck paying for a service they no longer want."
The agency said that its amended rule, most of which goes into effect 180 days after being published in the Federal Register, will apply to "almost all negative option programs in any media."
A negative option, according to the Federal Register, is when an offer contains a term or condition that lets the seller interpret a customer's silence, or lack of affirmative action, as acceptance of an offer — like, for example, auto-renewing subscriptions.
The updated rule will prohibit companies from misrepresenting or omitting facts when marketing negative options, require companies to provide important information before the customer gives over their credit card, and make sure that the companies get the customer's explicit consent before they are charged, the FTC explained.
The agency said its rule aims to address common problems with these types of subscriptions, such as companies obscuring the terms of their subscriptions, customers getting billed when they didn't agree to pay, and companies making it difficult or impossible to cancel subscriptions.
The FTC said it gets thousands of complaints a year about companies' subscription practices.
According to the FTC, that number has been on the rise in the last five years. In 2021, for example, the agency received an average of 42 consumer complaints a day, according to the press release.
In 2024, the agency has received nearly 70 complaints a day on average.
The FTC's crackdown on deceptive subscription practices has been a long time coming. The agency first announced its proposed rule last year but had to go through a lengthy public comment process before it could be finalized.
During that process, the agency said it received more than 16,000 comments from consumers, federal and state government agencies, consumer groups, and trade associations.