Consumers could soon find their subscriptions as easy to cancel as they were to set up, following a new ruling from the US Federal Trade Commission (FTC).
Its so-called ‘click to cancel’ rules will prevent companies from making it difficult for their users to cancel subscriptions – often when they were significantly easier to start up in the first place.
The rules would mean subscriptions entered into wholly online cannot require a telephone call or online chat to cancel. Auto-renewals may also be a thing of the past, with companies now requiring consent from their customers to renew subscriptions (for another year, say), or to switch from a free or low-cost trial to a full membership.
Any agreements entered in-person would require the business to offer the ability to cancel either by telephone or online.
Close watchers of the FTC were anticipating such a move, following the agency’s legal challenges against some big companies – not least software firm Adobe and retail giant Amazon (specifically its Prime membership product). For their part, both Adobe and Amazon have rejected the FTC’s claims.
The regulator has argued that some companies have long tricked users into signing up for memberships, or used certain website design elements aimed at pushing people towards auto-renewals. Then, those same companies were making it difficult – if not impossible – for users to cancel the agreement, with a process that’s often very far removed from the ease of signing up.
Explaining why the new rules were developed, FTC chair Lina Khan said: “Too often, businesses make people jump through endless hoops just to cancel a subscription.
“The FTC’s rule will end these tricks and traps. Nobody should be stuck paying for a service they no longer want.”
These US measures follow similar actions on this side of the Atlantic, when earlier this year the Digital Markets, Competition and Consumers Act 2024 was rolled out. It required businesses to provide their customers with clear information before any subscription agreements are entered into, as well as a requirement to remind customers when their trials are about to expire.
