The FTC proposes a rule to help consumers ditch subscriptions


A new rule proposed by the Federal Trade Commission on Thursday would make it easier for consumers to cancel recurring subscriptions.

The so-called click-to-cancel provision would require companies to simplify the cancellation process by allowing consumers to end services in the same way they signed up for them, so if a consumer signed up for a subscription on a site web, for example, you would need to be able to cancel online instead of having to do it over the phone or in person.

The proposal would also require sellers to ask consumers who are canceling their subscriptions if they want to know about other offers before presenting them, and provide consumers with annual reminders of their subscriptions before automatically renewing them.

The commission voted to approve the proposed rulemaking notice 3-1, with Commissioner Christine Wilson voting against it. claiming it was too broad as written.

The federal agency said it receives thousands of consumer complaints each year about billing for recurring services without their consent or dealing with difficult cancellation policies.

in a statementFTC Chair Lina Khan pointed to reports of gyms requiring members to cancel their memberships in person or by certified or notarized mail, and cell phone plans requiring calling a customer service representative «who will keep you in line to try to convince him to stay,» he said.

«These companies are betting that customers will be too impatient, busy or confused to jump through all the hoops,» Khan said.

Current laws and regulations «do not provide consumers and the industry with a consistent legal framework,» according to the federal agency announcement.

He notice of proposed rulemaking is part of agency review of the Negative Option Rule, approved in 1973, which requires vendors disclose terms of sale before consumers sign up and provide information on how consumers can cancel.

But the rule allows companies to continuously charge consumers for services indefinitely unless they take action to cancel, and it doesn’t regulate other marketing tactics that make it difficult to cancel, which the FTC is trying to change.

The public will be able to comment on the latest proposal for a 60-day period after it is published in the Federal Register, the government’s official journal.

An FTC spokesman said Thursday that officials do not yet know when the proposal will be published and available for public comment. It’s not immediately clear when the final rule might go into effect.

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