Plain Language for Consumers: FTC Makes Subscription Cancellation Easy

A new regulation by the Federal Trade Commission (FTC) promises to put an end to consumer frustrations when canceling subscriptions. While signing up for services is often completed with just a few clicks, unsubscribing almost always proves to be a challenge. Now, the FTC has introduced its final "Click-to-Cancel" rule. According to this, companies must offer a cancellation process as simple as the sign-up process—whether for gym memberships, streaming services, e-commerce, or cable television. FTC Chair Lina Khan emphasized that no one should pay for a service they no longer wish to use. The average American has about 4.5 subscriptions and spends approximately $924 annually on them—especially streaming services are popular, according to an analysis by the payment technology company Bango. The new rule, which is set to take effect 180 days after its publication in the Federal Register, addresses common issues with subscription plans. It targets misleading claims about products or services and difficult cancellation processes while protecting against unwanted charges. Laura Brett, Vice President of the National Advertising Division of BBB National Programs, states that canceling a subscription must be as straightforward as signing up. Customers who signed up online should be able to cancel with one click, while a phone or online-based cancellation should be possible for those who registered in person. The rule also stipulates that all essential information about the product, such as costs and deadlines, must be disclosed clearly and without deception before customers can be charged. Brett adds that more than 16,000 public comments were received following last year's announcement, addressing the difficulties in canceling subscriptions. The rule is not the first measure against dubious subscription practices, as previous settlements with Vonage and ABCmouse demonstrate.