The US Federal Trade Commission (FTC) has taken a significant step towards protecting consumers from deceptive subscription practices by adopting a new ‘click to cancel’ rule. This rule aims to make it easier for people to end subscriptions and will require businesses to make the sign-up and cancellation processes equally straightforward.
Under this new rule, businesses, including retailers and gyms, will need to obtain consent from customers before renewing subscriptions or converting free trials into paid memberships. Additionally, companies will be prohibited from forcing customers to navigate through chatbots or agents to cancel subscriptions that were originally signed up for online.
FTC chair Lina Khan emphasized the importance of this rule, stating, “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.”
This move by the FTC comes after legal action was taken against tech giants like Amazon and Adobe for similar deceptive practices. Amazon was accused of tricking customers into signing up for Prime subscriptions that renewed automatically, while Adobe allegedly violated consumer protection laws with hidden termination fees and a convoluted cancellation process.
The new rule is set to come into effect in around six months, giving businesses time to adjust their practices. This development aligns with a similar law introduced in the UK, highlighting a global effort to protect consumers from falling into subscription traps.
