The Federal Trade Commission (FTC) is making it easier to cancel subscriptions by ruling that the cancelation process should be as easy as the sign-up process.
Have you ever found yourself trying to cancel your Netflix account or gym membership, but month after month you’re still being charged fees? Well, you’re in luck because the Federal Trade Commission (FTC) will be siding with consumers by providing a “click to cancel” provision to let you cancel your unwanted subscriptions without hassle. The best part is that this provision is exactly how it sounds; you can cancel subscriptions, like streaming services, as easily as you signed up for them instead of getting the runaround from sales reps.
This is an amazing development in consumer protection efforts and has been part of a continued effort by the FTC in reviewing its 1973 Negative Option Rule. The Negative Option Rule is what the agency uses to combat deceptive business practices in relation to canceling subscriptions, memberships, and other recurring-payment programs. So next time you want to cancel your subscription to the Jelly of the Month Club, you should thank the FTC for allowing you to do it online rather than being forced to drive to their headquarters to cancel in person.
Not only will you be able to cancel your subscription with ease, but companies that resist this provision will also face steep penalties if they try twisting your arm in a Hail Mary attempt to keep your business. FTC Chair Lina M. Khan said it best when she stated, “Some businesses too often trick consumers into paying for subscriptions they no longer want or didn’t sign up for in the first place. The proposed rule would require that companies make it as easy to cancel a subscription as it is to sign up for one.”
There are three notable changes to consider in regard to this provision. First and foremost, consumers will be allowed to use a simple cancellation mechanism to cancel their subscription in just as many steps as it took to sign up for it. In other words, if you signed up for a service on their webpage in three clicks, then you should be able to go to the same webpage to cancel your subscription just as easily.
Secondly, sellers can’t try to retain your business if you tell them you want to cancel your subscription. This means that if a seller asks you if there is any other service offering or promotion that could convince you to stay on board, and you respond with an emphatic “no,” then they have to implement the cancellation process without trying to up-sell you or retain your business. This is great for consumers because they will no longer get strung along with the corporate runaround that could result in more unwanted payments.
The third notable condition will require sellers to send annual reminders to their customers to see if they want to continue services or cancel their subscriptions. Think about how much money you’d save by being reminded about those streaming services you signed up for to binge-watch a single show and forgot to cancel. So if you’re done with Stranger Things and don’t think Netflix has anything else to offer you, you’re not going to burn through $19.99 a month until you remember to cancel; you will be reminded.
For many, canceling a subscription is such a nauseating and daunting task that they just let their bank account get hit with fees month after month. But by the looks of it, this revenue-raising rigamarole at the behest of companies robbing you of your money is soon coming to an end! Though it is not presently clear when the finalized ruling on this proposal could take effect, let’s hope it happens soon, so we can sign up for services we will actually use on a month-to-month basis.