At long last, the United States Federal Trade Commission (FTC) has moved to force companies to make it as easy to cancel subscriptions as it is to sign up.
“Too often, businesses make people jump through endless hoops just to cancel a subscription,” Commission Chair Lina M. Khan said in a press release. “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 rule, dubbed “Click-to-Cancel,” will protect people from unfair recurring subscriptions and memberships that are intentionally made too difficult to cancel. It goes into effect in 180 days. The goal is to make canceling as easy as subscribing. For example, if you signed up for a subscription online, the new rule will force companies to allow you to cancel your subscription online as well.
FTC will put an end to hard-to-cancel subscriptions
The regulator will prohibit sellers from “misrepresenting any material fact made while marketing goods or services with a negative option feature.” Under the new rule, companies offering subscriptions will be obligated to “clearly and conspicuously disclose material terms” before you give them your billing details.
Companies will also be required to obtain your express informed consent “to the negative option feature before charging the consumer.” And most importantly, sellers must “provide a simple mechanism to cancel the negative option feature and immediately halt charges.”
My experience with pesky subscriptions
All I can say is—finally! While this rule will apply to companies offering subscriptions in the United States, and I live in Europe, I’ve experienced firsthand the nefarious tricks companies employ to discourage you from subscribing.
Like many people stuck at home during the pandemic, I started investing in stocks. I was inexperienced in stock trading, so I signed up for Jim Cramer’s paid newsletter. Smartly, I used a single-use credit card because I felt I might need to jump through various hoops to cancel my subscription.
I’m so glad I was thunking ahead because when it came the time to cancel my paid membership, Cramer’s company went to incredible lengths to keep me from unsubscribing, including forcing me to fill out various online forms and endure unsolicited phone calls from their sales teams trying to keep me with special offers.
Subscribing couldn’t have been simpler. All I had to do was fill out my billing details, hit the subscribe button and that was it. But when I wanted to cancel my membership a few months later, I realized that an unsubscribe button was nowhere to be seen. Worse, information about unsubscribing was hidden and ambiguous.
I was so fumed that I called their support. Remarkably, they offered a bunch of arguments to dissuade me from cancelling my subscription and refused to remove my credit card from the system outright. After a few days of back and forth, I succeeded in freeing myself from this subscription but only after I threatened legal action. This is why I prefer to buy my subscriptions via Apple’s In-App Purchase mechanism, even if it means paying more because of Apple’s fee. I can easily manage all in-app subscriptions in one place, and cancel at anytime with just a click.