The U.S. Federal Trade Commission has proposed a number of changes that it says will make it easier for people to cancel memberships and subscriptions that renew automatically. The FTC thinks that its “Click to Cancel” rules “would go a long way towards saving consumers from what seems like an endless struggle to cancel unwanted subscription payment plans.”
Even though the FTC has a “patchwork of laws and regulations” to protect consumers, these “do not provide consumers and industry with a consistent legal framework.” So, here is a list of the specific changes that the FTC wants to make:
A simple cancellation mechanism: If consumers can’t leave a programme easily when they want to, the negative option feature is just a way to keep charging them for things they don’t want. To fix this problem, the proposed rule would require businesses to make cancelling a subscription at least as easy as starting one. For instance, if you can sign up online, you should be able to cancel in the same number of steps on the same website.
New Requirements Before Making Additional Offers: When a customer tries to cancel their enrollment, the proposed rule would let sellers offer them other deals or changes. But sellers must first ask customers if they want to hear these kinds of pitches. In other words, a seller must take “no” for an answer and start the cancellation process as soon as they hear “no.”
New requirements regarding reminders and confirmations: Before negative option programmes for things other than physical goods are automatically renewed, the proposed rule would require sellers to send an annual reminder to customers who have signed up for them.
The effects of these changes would be wide-ranging, but they would probably affect a number of online services and subscriptions, such as apps from the App Store. It would also affect things like gym memberships and other subscriptions and memberships.
Before making any more changes, the FTC will soon start taking feedback on these ideas.