If you’ve ever been caught in a seemingly endless loop trying to cancel a subscription, you’re not alone. Consumers have complained about companies making ending memberships and recurring services difficult.
However, the Federal Trade Commission (FTC) has just announced a major rule that will change that.
On October 16, 2024, the FTC unveiled a new “click-to-cancel” rule to make it easier for consumers to end recurring subscriptions and memberships. Under the new rule, businesses must ensure that canceling a service is just as easy as signing up for one. This change is part of the FTC’s effort to protect consumers from what it calls “negative option marketing” — a practice where consumers are automatically enrolled in recurring payments unless they cancel.
FTC Chair Lina M. Khan said, “Too often, businesses make people jump through endless hoops just to cancel a subscription. 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 new rule will apply to most subscription services, including those offered online, through telemarketing, or in other media, and will prohibit companies from misrepresenting important details to consumers. This means companies will now have to clearly disclose terms before they obtain your billing information and get your informed consent before charging you. If you want out, they must provide an easy and straightforward way to cancel — no more endless emails or calls just to stop a service.
This update comes after the FTC received over 16,000 public comments on the proposal, and consumer complaints regarding subscription practices have surged. According to the agency, in 2024 alone, the FTC has been fielding an average of 70 complaints per day, up from 42 per day in 2021.
Most of the new rule’s provisions will become effective 180 days after they are published in the Federal Register.
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