FTC Tackles Hard-to-Cancel Subscriptions
The FTC is tackling subscription services that make it hard to cancel or require users to call in to cancel.
Companies have become notorious for making it easy for users to sign up for subscriptions and then burying cancellation options in the depths of their websites or requiring users to call in and deal with high-pressure sales personnel to cancel.
The FTC is proposing new rules that would crack down on such behavior, making it as easy to cancel as it is to sign up.
“Some businesses too often trick consumers into paying for subscriptions they no longer want or didn’t sign up for in the first place,” said FTC Chair Lina M. Khan. “The proposed rule would require that companies make it as easy to cancel a subscription as it is to sign up for one. The proposal would save consumers time and money, and businesses that continued to use subscription tricks and traps would be subject to stiff penalties.”
The new rules would require businesses to implement easy-to-use cancellation options and force them to ask users whether they want to hear additional offers when they want to cancel. If the user says “no,” the business will be required to immediately process the cancellation rather than resort to high-pressure sales.
The requirements would also require companies to provide an annual reminder before auto-renewing subscriptions involving anything other than physical goods. This will help reduce the number of phantom subscriptions where users sign up for something and then forget about it, needlessly paying month after month and year after year.
The new rules will likely be welcomed by most consumers, especially those who have ever struggled to cancel a subscription.
