Cancel Culture

The FTC's new rule makes it easier for consumers to cancel subscriptions and memberships they no longer want.

By Cynthia Martens

The Federal Trade Commission (FTC) introduced a "click-to-cancel" rule on October 16, amending the 1973 Negative Option Rule to target unfair or deceptive practices linked to "subscriptions, memberships, and other recurring-payment programs in an increasingly digital economy where it's easier than ever for businesses to sign up consumers for their products and services." The FTC said it had received an average of 70 complaints daily this year about recurring subscription and other negative option practices. The new rule will go into effect 180 days after it is published in the Federal Register.

"Too often, businesses make people jump through endless hoops just to cancel a subscription," said FTC Chair Lina M. Khan. "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."

Consumer Watchdog Director at Public Interest Research Group (PIRG) Teresa Murray lauded the FTC rule in a statement. "Subscriptions and memberships have often been like a visit to the Hotel California: 'You can check out any time you like, but you can never leave.' Now, you'll be able to leave," she said.

The updated "click-to-cancel" rule will apply to almost all negative option programs in any media, prohibiting sellers from misrepresenting material facts in connection with negative option marketing. Further, sellers will be required to clearly and conspicuously disclose key terms connected to a negative option prior to obtaining consumers' billing information, and to receive consumers' express, informed consent before billing them. Going forward, sellers must make it as easy to cancel a membership or subscription as it is to enroll in the first place by providing "a simple mechanism to cancel the negative option feature and immediately halt charges."

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