FTC 'click to cancel' rule makes it easier to ditch subscriptions

WASHINGTON - Ever been trapped into paying for a subscription or membership you no longer want or need but can't cancel? Breaking up with your gym or streaming service is about to get a little easier.

The Federal Trade Commission on Wednesday adopted a “click to cancel” rule that requires businesses to make it as easy to cancel a service as it was to sign up.

Signed up online? Click to cancel. Signed up in person? Cancel online or over the phone.

“Too often, businesses make people jump through endless hoops just to cancel a subscription,” commission Chair Lina Khan said in a statement. “Nobody should be stuck paying for a service they no longer want.”

Under the new rule that will take effect in the coming months, businesses must get consent for subscriptions, auto-renewals and free trials that convert to paid memberships. Canceling the services has to be “at least as easy” as signing up, with no tricks or traps, the FTC said.

The FTC rule is part of President Joe Biden’s efforts to crack down on “junk fees.”

The rule passed 3-2, with the FTC's two Republican commissioners voting against it.

While some subscriptions can be canceled with a couple clicks or a phone call, when companies make it difficult to cancel a subscription, customers can end up with monthly charges long after they no longer want or need a product or service.

Unwanted subscriptions have become such a headache for consumers, a cottage industry of apps to help subscribers find and cancel subscriptions has emerged.

“We know signing up for subscriptions is so easy, it is miraculous. That is why we know that the difficulty of cancellation is not an accident. It is a choice. And it's a choice that's causing real harm to consumers,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection told USA TODAY last year.

Complaints about the difficulty of dropping subscriptions have soared in recent years. The FTC estimates it receives nearly 70 a day on average.

After proposing the rule last year, the FTC received thousands of comments from consumers who had trouble canceling services, from cable subscriptions to subscriptions for dietary supplements.

The comments made it clear “that consumers were really struggling with how to cancel and get out of these long-term commitments where they continued to be billed,” said Laura Brett, vice president of BBB National Programs’ National Advertising Division, the advertising industry’s self-regulatory body. (Source: USA Today)