A new rule is coming to the US that will make it easier for customers to cancel subscriptions and memberships they no longer want. This rule, known as the “click-to-cancel” rule, will prevent businesses from deceiving consumers about subscriptions and will require them to get consent before charging for memberships, auto-renewals, and programs connected to free trials.
The Federal Trade Commission (FTC) has announced that businesses will have to allow customers to cancel subscriptions as easily as they can sign up for them. This rule is set to take effect 180 days after it is published in the Federal Register. According to FTC Chair Lina Khan, more than 16,000 public comments were received during the rulemaking process, with many people expressing the challenges they face when trying to cancel various subscriptions, from gym memberships to phone plans.
The FTC’s goal with this rule is to eliminate the obstacles and traps that consumers face when trying to cancel services they no longer need, ultimately saving them time and money. The impact of the pandemic highlighted these issues, especially when businesses required in-person cancellations during closures.
The Biden administration has embraced this rule as part of its ‘Time is Money’ initiative, aimed at addressing consumer-related problems. However, the US Chamber of Commerce has criticized the administration’s approach, arguing that excessive regulations could lead to higher costs for consumers.
Democratic vice presidential nominee Kamala Harris has shown support for the “click-to-cancel” rule, positioning it as a policy she would advocate for if elected. The final rule was passed by FTC commissioners in a 3-2 vote.
Overall, this new rule is designed to empower consumers and give them more control over their subscriptions and memberships. By making the cancellation process more straightforward and transparent, businesses will be held accountable for their practices, ultimately benefiting consumers across the US.