New FTC rule aims to end subscription cancellation nightmares
We’ve all been there. You sign up for a free trial for something you need in a hurry, only to find out that it’s not everything it’s cracked up to be, and getting rid of it is a lot harder. This sort of thing has been associated with gym memberships and “music club” subscriptions for decades, but recently it’s become much more prevalent online, where you can sign up for something with a few clicks but getting rid of it requires a call to the company or an email to support. The US Federal Trade Commission is as sick of it as the rest of us.
In a 3-1 vote, the FTC has proposed to amend a statute first put in place in 1973 to make unsubscribing from services easier and more consistent in the modern world, as reported by Ars Technica. Called the “click to cancel” provision to the original Negative Option Rule, the Commission wants to “require businesses to make it at least as easy to cancel a subscription as it was to start it.” So, if it takes three clicks from the Amazon home page to subscribe to Amazon Prime, it should take no more than three clicks to cancel it.
Crucially, this rule would demand that the same method be available for signing up or canceling: no more “call our support line to confirm your cancellation.” The proposed changes would also limit the kinds of offers that businesses can make before confirming the cancellation, giving consumers the option to turn down even looking at the pitches for, say, a month of free service. Finally, the FTC proposes a requirement for an annual reminder before a customer is automatically charged for a renewing subscription. These changes might mean that Googling for “how the hell do I cancel my Peacock Plus subscription?” might be a thing of the past.
The FTC will be accepting public comment on the Click to Cancel provision. You can expect a bitter fight from the companies that benefit most from free trials that suddenly become hard to cancel. But with a 3-1 vote from the Commission’s chairs and a general pro-consumer slant under the current administration, the changes have a decent chance of making it into federal guidelines.