Federal Trade Comm. Announces Final "Click-to-Cancel" Rule Making It Easier for Consumers to End Recurring Subscriptions

Federal Trade Commission Announces Final “Click-to-Cancel” Rule Making It Easier for Consumers to End Recurring Subscriptions and Memberships


Agency acts after receiving more than 16,000 comments from the public

October 16, 2024

The Federal Trade Commission today announced a final “click-to-cancel” rule that will require sellers to make it as easy for consumers to cancel their enrollment as it was to sign up. Most of the final rule’s provisions will go into effect 180 days after it is published in the Federal Register.

“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’s updated rule will apply to almost all negative option programs in any media. The rule also will prohibit sellers from misrepresenting any material facts while using negative option marketing; require sellers to provide important information before obtaining consumers’ billing information and charging them; and require sellers to get consumers’ informed consent to the negative option features before charging them.

The final rule announced today is part of the FTC’s ongoing review of its 1973 Negative Option Rule, which the agency is modernizing to combat unfair or deceptive practices related to subscriptions, memberships, and other recurring-payment programs in an increasingly digital economy where it’s easier than ever for businesses to sign up consumers for their products and services.
https://www.ftc.gov/news-events/news/press-releases/2024/10/federal-trade-commission-announces-final-click-cancel-rule-making-it-easier-consumers-end-recurring?utm_campaign=ftc_announces_final_%E2%80%9Cclic&utm_content=1729079408&utm_medium=social&utm_source=twitter


The One-Click Economy
Digital subscriptions are here to stay. What should we do about that?

by Joanna Marsh June 10, 2024
SNIP
Companies are also banking on consumers being complacent with their subscriptions. An August 2023 study from the National Bureau of Economic Research entitled “Selling Subscriptions” looked at what happened when consumers were faced with the choice of renewing subscriptions after they got their credit and debit cards replaced. From that natural experiment, the authors determined that inattentiveness can actually raise seller revenues by anywhere between 14 percent and more than 200 percent.

“It can be a powerful tool for growth, as well as guaranteed recurring revenue,” Fitzgerald said. “Subscription models benefit businesses by allowing them to build stronger and longer-term relationships with their customers; lower customer retention spend; improve demand forecasting; and identify opportunities for upselling/cross-selling.”
https://prospect.org/economy/2024-06-10-one-click-economy/