FTC Tackles Subscription Traps With ‘Click to Cancel’ Rule

The Federal Trade Commission building in Washington on Sept. 19, 2006. Paul J. Richards/AFP via Getty Images

It will soon be easier for consumers to end recurring subscriptions and memberships, thanks to a rule that was officially updated by the Federal Trade Commission (FTC) on Wednesday.

The changes will help Americans get their money back after consistently being misled by sellers, according to the FTC.

“Too often, businesses make people jump through endless hoops just to cancel a subscription,” Commission Chair Lina M. Khan said in a statement. “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.”

The agency outlined in a fact sheet that sellers often don’t tell the truth or leave out necessary information or consumers get billed even when they did not agree to pay. Oftentimes, sellers make it difficult or impossible to cancel a service.

According to the federal agency, the situation appeared to be getting worse over the years. The number of complaints has increased steadily over the past five years, according to the agency. The commission in 2024 received nearly 70 consumer complaints per day on average. That’s up from 42 daily complaints in 2021.

Before Wednesday’s decision, the FTC received more than 16,000 comments from consumers, consumer advocacy groups, federal and state government agencies, and trade associations.

Most notably, under the amended “Negative Option” rule, a simple “Click to Cancel” option should be available for those who have signed up for a subscription or membership online. This option must be as quick and easy as it was to sign up. If a consumer signed up in person, they should be able to also cancel online or over the phone.

Additionally, information about recurring subscriptions or memberships must be truthful, clear, and easy to find.

The updated provisions state that potential customers must know what they are agreeing to before they sign up. At the same time, sellers have to be able to show that people knew what they agreed to before they signed up.

Wednesday’s vote was 3–2.

Commissioner Melissa Holyoak voted against the final provisions because she believed that the process was rushed and that the amendments were too broad.

“Had political leadership at the Commission taken more time to engage with other Commissioners to refine and improve the Rule, my vote and statement would look very different,” Holyoak wrote in a dissenting statement. “Instead, less than a month from November 5, the Chair has put political expediency over getting things right.”

In a separate statement, Commissioner Rebecca Slaughter said the changes “clarified, narrowed, and ultimately improved” what was originally proposed. Slaughter also thanked her colleagues for the “deep engagement” in the process.

NTD, the sister media outlet of The Epoch Times, reached out to the commission for further comment but did not receive a response by publication time.

Meanwhile, President Joe Biden praised the move.

“No American should have to worry about being tricked into buying subscriptions and memberships—or staying in either against their will,” Biden said in a statement on X. “Today, my Administration is taking action to ensure folks don’t have to jump through hoops to cancel them.”

Most of the final provisions will go into effect 180 days after it is published in the Federal Register.

From NTD News