The Federal Trade Commission (FTC) has approved a new “Click-to-Cancel” rule requiring companies to give consumers the ability to easily cancel auto-renewing subscriptions. The process of canceling a subscription must be as easy as the sign-up process.
The rule will go into effect 6 months after it is published in the Federal Register. It will apply to almost all programs that automatically renew subscriptions.
Companies will be prohibited from misrepresenting information about their services. They would also be required to get consumers’ explicit consent before charging and provide a simple mechanism for canceling subscriptions to stop the charge immediately.
Too often, businesses make people jump through endless hoops just to cancel a subscription,” said Commission Chair Lina M. Khan. “The FTC’s rule will end these tricks and traps, saving Americans time and money. Nobody should be stuck paying for a service they no longer want.”
The Commission decided on an increase in complaints about automatic subscription renewals, with an average of 70 complaints per day in 2024, up from 42 per day in 2021. The new rule is designed to protect consumer rights in a digital economy where the subscription process has become simpler and canceling subscriptions is often difficult and inconvenient.
- FTC Fact Sheet: Fact Shee.
- Draft text for publication in the Federal Register: https://www.ftc.gov/legal-library/browse/federal-register-notices/negative-option-rule-final-rule
- More information on Google News.
