Some subscriptions are easy to start, but a royal pain in the neck to cancel. The Federal Trade Commission is looking to end that.
The FTC on Thursday proposed the “click to cancel” rule, which would require sellers to make it as easy for consumers to cancel an enrollment as it was to sign up.
“Some businesses too often trick consumers into paying for subscriptions they no longer want or didn’t sign up for in the first place,” said FTC Chair Lina M. Khan in a statement. “The proposal would save consumers time and money, and businesses that continued to use subscription tricks and traps would be subject to stiff penalties.”
Every year, thousands of people complain to the FTC about being unable to find their way out of subscriptions, often with gym and cable companies. Many more suffer in silence.
The proposal would force companies to make several changes to their subscription policies.
First, they would be required to make available an option to cancel a subscription in the same way it was started. In other words, if you’re able to sign up online, you should be able to cancel on the Website as well, in the same number of steps.
Businesses would be allowed to offer consumers modifications and other offers when they begin to cancel their membership, but once they’re told “no,” they would be required to begin the cancellation process.
And, subscribers would receive an annual reminder before their subscription is auto-renewed.
The FTC approved the proposal with a 3-1 vote. It will next enter a 60-day period of public comment.
The proposal follows stricter cancelation policy rules that were put into effect in Europe last year. That forced Amazon to make some changes to its Amazon Prime program. The FTC notes that 18 states have their own laws about difficult-to-cancel subscriptions. Virginia, for instance, imposes civil penalties of $5,000 per violation.