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FTC Proposes ‘Click To Cancel’ Rule For Subscriptions

Summary:

  • The FTC is proposing a “click to cancel” rule that would force subscription services to make it as easy to cancel as it is to sign up.
  • The rule will also require businesses to offer an opt-out option upfront and send reminders to subscribers that they are still paying for the service.
  • This proposed regulation could apply only to commercial subscription services but not non-commercial services like donations.

 

Difficult to cancel subscriptions have become such an issue that the FTC is proposing a ban and rule for making it easier.

 

Called ‘click to cancel’, the federal regulator wants a rule that forces companies charging subscriptions to make it as easy to cancel the services as it is to sign up for them. Part of the rule will be that a business cannot for example, let you signup by clicking, and then require you to make a call or visit a physical location for cancellation.

 

In addition, the rule will mandate businesses to offer an opt-out option upfront instead of barraging users with ‘special offers’ when they want to cancel a subscription service. Then, they should send reminders to subscribers that they are still paying for the service because they have not cancelled it.

 

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Members of the public are allowed to share their opinion on the proposal before the commission goes ahead to make it a law. FTC chair Lina Khan said that they receive a lot of complaint from users about companies manipulating them to keep paying for subscriptions they don’t want.

 

The proposed regulation may not apply to non-commercial services like donations as the FTC is going after commercial subscription service companies for now.

 

Already, the commission bans unlawful and deceptive practices like disguised ads, buried terms, data and privacy collection, and more. Yet, this rule will make what is unlawful clearer in terms of subscription services.

 

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Onwuasoanya Obinna

A reader of books and stringer of words. Passionate about Science and Tech. When not writing or reading he is surfing the web and Tweeting.