FTC Announces Final Click to Cancel Rule for Subscriptions
The Federal Trade Commission (FTC) has finalized a new “click-to-cancel” rule, aimed at making it as easy for consumers to cancel subscriptions as it is to sign up for them. This rule is part of the FTC’s ongoing effort to combat deceptive practices in subscription and recurring-payment programs. Most provisions will take effect 180 days after publication in the Federal Register.
Key provisions include:
– Prohibiting businesses from making it difficult for consumers to cancel subscriptions.
– Requiring clear disclosure of terms before billing.
– Obtaining informed consent from consumers before charging for subscriptions.
– Providing a simple cancellation process.
The rule applies to almost all “negative option” programs, where consumers must take action to opt out of ongoing charges. It aims to curb deceptive tactics in the increasingly digital economy. The rule comes after the FTC reviewed public comments and made some changes, including removing a requirement for annual subscription reminders.
The FTC’s action follows years of increasing consumer complaints about negative option practices, with nearly 70 complaints per day in 2024. The rule was approved in a 3-2 vote, with some dissent from commissioners.