FTC 'Click to Cancel' proposal would make canceling subscriptions much easier

midian182

Posts: 8,809   +110
Staff member
In a nutshell: There are numerous subscription services available today, from streaming sites like Netflix and Disney Plus to non-digital services like gym memberships. Signing up online is usually very simple, yet canceling is often a lot more complex, sometimes intentionally. But the FTC is trying to change things.

The Federal Trade Commission on Thursday proposed a 'Click to Cancel' provision that would require companies to make the process of canceling recurring subscriptions as simple as signing up for them.

Many companies turn their cancelation mechanisms into arduous tasks that require many steps. Some even demand customers call phone numbers, where they're kept on hold for so long that they decide it isn't worth it. Others require in-person cancelations that involve reps trying to convince customers to stay. These deceptive techniques often keep people paying for subscriptions even when they've stopped using the services.

"The proposal would save consumers time and money, and businesses that continued to use subscription tricks and traps would be subject to stiff penalties," said FTC Chair Lina M. Khan.

The proposal is part of the FTC's ongoing review of its 1973 Negative Option Rule, which the agency uses to combat unfair or deceptive practices related to subscriptions, memberships, and other recurring-payment programs. It received 17,427 complaints under this rule last year and 16,020 complaints in 2021.

Anyone who has tried to cancel a subscription may be familiar with being bombarded with offers of different subscriptions, a temporarily reduced price, and other perks - all attempting to get customers to stay signed up. The FTC proposes allowing people to decide whether they want to hear these deals before sellers pitch them, I.e., the companies must take "no" for an answer.

Finally, the FTC also proposes that companies send customers an annual reminder of any automatic subscription renewals for anything other than physical goods.

Companies that violate these rules would face a fine of $50,000 per day. "When you're talking about companies that have hundreds or thousands or millions of consumers," Khan says, "that could add up quite quickly."

The FTC voted 3-1 to publish a notice of proposed rulemaking in the Federal Register, the first step in the process. Members of the public can now submit comments on the proposal.

According to a survey commissioned by market research firm C+R Research, consumers underestimate how much they spend on all subscription services by an average of $133 per month.

Masthead: Elisa Ventur; Center: New America

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Neatfeatguy

Posts: 1,268   +2,395
Amazon Prime - this requires 4 clicks, if I remember correctly, to confirm that you want to cancel your subscription.

1) Click to cancel.
2) Then you're told about what you'll be missing out on and asked if you're sure you want to cancel.
3) Then you're told about something else you'll miss out on if you cancel and asked if you're sure you want to cancel.
4) Then you're told one more time about what you'll miss out on and given one last chance to keep your subscription or finally cancel.
 

Bl00dyMinded

Posts: 538   +833
Amazon Prime - this requires 4 clicks, if I remember correctly, to confirm that you want to cancel your subscription.

1) Click to cancel.
2) Then you're told about what you'll be missing out on and asked if you're sure you want to cancel.
3) Then you're told about something else you'll miss out on if you cancel and asked if you're sure you want to cancel.
4) Then you're told one more time about what you'll miss out on and given one last chance to keep your subscription or finally cancel.
Don't forget if they offer you a discounted price to stay also lol. I don't know about Amazon, but I know many others do it.
 

Uncle Al

Posts: 9,572   +8,874
Companies that violate these rules would face a fine of $50,000 per day

I would recommend going one step further and make it $50,000 per day, per occurrence.
 

VaRmeNsI

Posts: 1,066   +1,545
Don't be suprised if they jack up prices to compensate for the loss of revenue by not being able to do this.
 

wiyosaya

Posts: 8,760   +8,308
As I understand it, there is also a problem of unwittingly signing up for subscriptions (particularly periodic delivery of some items from places like Amazon). IMO, this should cover those deceptive practices, too, to dissuade/prevent companies from trying to fool customers into such subscriptions.

IMO, subscriptions are everywhere these days. Everyone wants a piece of your pie. Honestly, I am rather tired of literally everyone wanting me to pay them on a monthly basis. Even my local public broadcasting service is prioritizing what they call "sustainer membership." My take for them is learn HTF budget the $250 I give you on an annual basis over the 12-months its good for.
 

scavengerspc

Posts: 3,080   +3,321
TechSpot Elite
If you see a long self-serving (for the company) process ahead for canceling, just go to the site and remove the method of payment.

What I would like to see change is keeping our money after we cancel until that month\year, is over. I'm cancelling for a reason. I Don't Want Your Stuff Anymore!
 

PEnnn

Posts: 1,063   +1,473
If you see a long self-serving (for the company) process ahead for canceling, just go to the site and remove the method of payment.

What I would like to see change is keeping our money after we cancel until that month\year, is over. I'm cancelling for a reason. I Don't Want Your Stuff Anymore!

That would be the best option.

Except....some credit card companies will still accept the monthly charge and still bill you when those shady companies keep on submitting the monthly fees!!

That was the main reason why I canceled that cursed Capital One card a few years ago.....
 

Ravey

Posts: 392   +187
I hope something like this comes to the UK,

Recently I had accidentally setup TWO subscriptions with a switziland company (both £15 a month each!) thinking I was asking for a refund on a train ticket. My fault for not checking what I was doing but also Trainlines fault for not making their website clear enough that I was in fact signing up to an online advert!

To get to the point - roughly 6 months later I spotted my error and tried to cancel the subscripts, which was painfully difficult! I'n the end I had to request my bank force close the subscriptions on my behalf.

It would have been much simpler if there was a "click here to cancel" and that was the end of it!

Honestly I felt soo old when I fell for this lol!