‘Click-to-Cancel’ Rule Cracks Down on Unwanted Subscriptions

To eliminate the potential hassles of stopping unwanted subscriptions and memberships, the Federal Trade Commission (FTC) has made “click to cancel” official. Per the rule, subscription services that make it easy to sign up online must also make it easy to cancel.

The FTC noted that some businesses put barriers up to make canceling a subscription or membership unexpectedly difficult. The regulator described how the cancellation process can get someone caught in a “doom loop” of endless customer service transfers and dead-end automated phone systems. The click-to-cancel directive, first proposed a year ago, will hopefully eliminate hidden cancel buttons and other hoops to jump through.

The FTC receives numerous daily consumer complaints about the difficulties of canceling subscriptions or memberships that were initially very easy to sign up for. According to the agency, the number of complaints has escalated substantially.

“Over recent years, we’ve seen increasingly that some firms make it extraordinarily easy to sign up but absurdly difficult to cancel,” said FTC Commissioner Lina Khan, per NBC News. “And Americans end up paying more money and wasting their time as a result. And so that’s what we’re going to put an end to with this rule.”

Subscription Cancellation Crackdown

Under the click-to-cancel rule, part of the Biden Administration’s “Time Is Money” initiative, companies cannot mislead consumers about their services, pricing, or cancellation process. Also, companies can no longer get away with quietly billing a customer who did not know they had a subscription.

While the rule is just now in place, Amazon has already gotten into some legal trouble related to hard-to-cancel subscriptions. The FTC has taken action against the company for allegedly tricking customers into Prime subscriptions without their consent and then making it difficult to cancel them. The agency alleges that Amazon’s cancellation process was purposely designed to prevent a consumer from ending their subscriptions.

“At the end of the day, if a business is dependent on tricking or trapping people into subscriptions, that’s not a good business model, and that’s not one that we should stand for,” Khan said.