The United States’ Federal Trade Commission (‘FTC’) has created a ‘Click to Cancel’ rule to ensure companies make customer subscription sign ups and cancellations as easy as each other.
This comes after Federal Regulators have received over 70 complaints a day regarding subscription charges and confusing cancellation plans that individuals did not realise they had signed up for at the start.
The FTC chair, Lina Khan, has stated ‘Too often, businesses make people jump through endless hoops just to cancel a subscription. 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 ban covers when businesses require customers to speak to a computer or agent to cancel subscriptions, and instead requires the businesses to make cancellations take the same number of clicks to end what they signed up for, knowingly or unknowingly.
Where memberships were signed onto in person, business must, under the new rule, provide customers with the option to cancel online or by telephone. The rule also requires companies to clearly state the terms of the subscriptions, and make them easier to understand for their customers to ensure they are not ‘tricked or trapped into subscriptions’.
If companies fail to follow the new rules, they could face civil penalties.
This new rule is to take effect from April 2025.
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