The US Federal Trade Commission (FTC) will introduce a ‘click to cancel’ rule in the coming months. The new mandate will make it easier for people to end subscriptions, by forcing companies to make subscription sign-ups and cancellations straightforward.
The new law also forces businesses including retailers and gyms, to first get consent from customers before renewing subscriptions or changing free trials into paid memberships.
“Too often, businesses make people jump through endless hoops just to cancel a subscription,” FTC Commission Chair Lina Khan said in a press release. “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.”
According to the FTC website, the final rule will provide a consistent legal framework by prohibiting sellers from:
- misrepresenting any material fact made while marketing goods or service with a negative option feature;
- failing to clearly and conspicuously disclose material terms prior to obtaining a consumer’s billing information in connection with a negative option feature;
- failing to obtain a consumer’s express informed consent to the negative option feature before charging the consumer;
- failing to provide a simple mechanism to cancel the negative option feature and immediately halt charges.
Most of the final rule’s provisions will go into effect 180 days after it is published in the Federal Register.
By CEO NA Editorial Staff
