Federal 'Click to Cancel Subscriptions' Rule Finalized Amid Criticisms
A rule aiming to simplify subscription cancellations, akin to California's recent law, has now been finalized at the federal level by the Federal Trade Commission (FTC). This initiative seeks to eliminate the troublesome practices companies employ to retain subscribers against their will.
Nationwide Enforcement
The FTC's rule compels businesses to ensure that the cancellation process of a subscription is just as straightforward as subscribing. If users can sign up for a service with a few clicks, they should be able to cancel it just as easily. The FTC has scrutinized companies like Adobe following accusations of making cancellations arduous for users.
Rule Requirements
To safeguard consumers, the new rule stipulates:
- Clear and honest disclosure of all significant details.
- Explicit mention that subscriptions continue unless cancelled by the user.
- Acquisition of "express informed consent" for automatic renewals.
- Simplified cancellation steps matching the ease of initial signup.
Revisions and Weakening
Originally, the rule proposed that businesses remind customers annually about active subscriptions, catering to users who might lose track of these recurring expenses. However, this requirement was scrapped.
Moreover, companies can now legally attempt to retain subscribers by presenting them with benefits or discounts during the cancellation process, a provision removed from the earlier draft to ensure a frictionless unsubscribe experience.
Implementation Timeline
Unless challenged legally, this federal regulation will become effective in six months, providing businesses a limited window to adjust their systems to comply with these newly established guidelines.
This update was reported by 9to5Mac.