FTC makes it easier to cancel subscriptions

The Federal Trade Commission issued new click-to-cancel rules Wednesday, hoping to crack down on businesses that make it tough to stop subscriptions.

The FTC said the rules, which passed with a 3-2 vote, will make businesses get consent from customers before charging them a subscription fee and must provide them with an easy way to cancel.

“Too often, businesses make people jump through endless hoops just to cancel a subscription,” FTC Chair Lina Khan said. “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 week’s rule changes are part of the FTC’s review of the Negative Option Rule. A negative option is a legal feature that lets a business interpret a customer’s inaction as acceptance of an offer, meaning the customer has to go out of their way to cancel the subscription or offer.

The new rule will make it illegal to misrepresent facts in marketing subscriptions with a negative option feature, failing to obtain consent to the negative option feature before charging a customer, and failing to provide an easy cancellation option to customers to immediately halt charges.

The commission said it adopted the new rule after receiving record numbers of complaints from customers, government agencies and consumer groups. According to the FTC, it has received over 70 complaints per day on average and around 16,000 comments after it announced a review of click-to-cancel rules in March 2023.