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FTC finalizes rule that makes it easier to cancel unwanted subscriptions

Subscription providers will be required to inform customers why they are signing up, obtain their consent and provide clear cancellation mechanisms.

Companies will soon have to make canceling a subscription as easy as signing up for one under a new Federal Trade Commission rule aimed at stopping predatory business practices that force consumers to pay for services that they don’t want to.

If you create an account online, the company must provide an easy way to cancel the subscription online. If you register in person, you must be authorized to cancel in person or by phone. Additionally, the rule requires companies to provide clear and truthful information to subscribers about what they are subscribing to and obtain their consent before enrolling them in a negative opt-in feature, which is a subscription model in which the customer is signed up for a service and billed continuously, unless they take additional, often hidden, steps to reject the subscription.

“Too often, companies force people to jump through endless hoops just to cancel a subscription,” FTC Chair Lina Khan said in a statement. “The FTC rule will put an end to these tricks and traps, saving Americans time and money.” No one should have to pay for a service they no longer want.

The FTC approved the new rule in a 3-2 vote. Several provisions were removed from earlier versions of the agency’s rule, including a requirement that sellers remind customers of their ability to opt out of a subscription each year and a requirement that sellers obtain consent from customers before offering them additional offers in order to incentivize them to do so. stay in a subscription. Most provisions of the new rule will take effect 180 days after its publication in the Federal Register.

Business groups seeking to remove the new rule have argued that they receive very few complaints from customers who are unable to cancel their subscriptions and that adding a simple “click to cancel” feature on websites would lead customers to accidentally cancel the services they wanted. But in its announcement of the new rule, the FTC said the number of complaints it receives about hard-to-cancel subscriptions is increasing, from an average of 42 per day in 2021 to 70 per day in 2024.

In recent years, the agency has also sued several prominent technology companies for operating predatory subscription services. It claims Amazon “tricked” millions of people into signing up for Amazon Prime, then used dark schemes to make it difficult to cancel those subscriptions. The FTC also accused Adobe of making it difficult to cancel its services and hiding information about early termination fees it charged customers when they canceled.