🛑 Simplified Subscription Cancellations
The U.S. Federal Trade Commission (FTC) announced its "click-to-cancel" rule, making it easier to cancel subscriptions. The rule applies to all automatically renewing plans, from streaming services like Netflix to memberships like Amazon Prime or gym contracts. This regulation requires companies to allow cancellations through the same method customers used to sign up, cutting down the hoops people often have to jump through just to stop payments. FTC Commissioner Lina Kahn said, “Nobody should be stuck paying for a service they no longer want.”
📈 Addressing Growing Complaints
Complaints about deceptive subscription practices have increased over the last five years. In 2024, the FTC received around 70 complaints per day, a significant jump from 42 daily in 2021. These reports highlight how companies make canceling difficult, using confusing systems or extra steps. The new rule aims to tackle these "tricks and traps" by enforcing consumer-friendly policies that will take effect 180 days after being published in the federal register.
💡 What’s Changing for Businesses
Under the new rule, businesses must inform customers how to cancel before collecting payment details. The rule affects subscriptions with automatic renewals, such as free trials that start charging after a period. Initially, the FTC planned to mandate annual reminders on how to cancel, but this part was dropped in the final version. Companies also won’t be allowed to present alternative plans to persuade customers to stay without their explicit consent.
⏳ Timeline and Impact
The FTC’s rule will officially take effect 180 days after being published. This gives companies time to adapt their systems. While businesses might resist these changes, consumers are expected to benefit from the simplified process. According to the FTC, this move will save people both time and money, making it easier to drop subscriptions they no longer need. It represents a win for consumers, eliminating the frustration of unnecessarily complicated cancellations.
Do you think companies will comply with this FTC rule?
