It could soon be easier to cancel automatic monthly charges: Here’s why
Ask anyone who has tried to cancel a recurring subscription and they’ll tell you it’s easier said than done. Changing that is the goal of a new rule proposed by the Federal Trade Commission.
The FTC rule would require a “click to cancel” provision requiring companies to simplify the cancellation process by allowing customers to terminate services the same way they signed up for them. For example, if a consumer signed up for a subscription on a website, they could need to be able to cancel it online rather than have to do it by phone or in person.
The rule is designed to save consumers time and money, according to FTC Chair Lina M. Khan.
“Some businesses too often trick consumers into paying for subscriptions they no longer want or didn’t sign up for in the first place,” Khan said in a statement. “The proposed rule would require that companies make it as easy to cancel a subscription as it is to sign up for one. The proposal would save consumers time and money, and businesses that continued to use subscription tricks and traps would be subject to stiff penalties.”
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The proposed rule would also require sellers to get consent before making additional offers at the time of cancellation as well as providing annual reminders of the subscription.
The agency said the rules are in response to thousands of complaints it receives each year regarding cancellation policies. FTC is currently accepting public comment on the rule after being published in the Federal Register. The date for publication has not been scheduled.