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Didn’t have time to cancel that streaming subscription before you got charged again? The Federal Trade Commission on Thursday announced new proposals that could require businesses and sellers to make canceling subscriptions, memberships and other services easier.
The commission’s “click to cancel” provision would require “sellers to make it as easy for consumers to cancel their enrollment as it was to sign up,” the FTC said in a news release Thursday. The proposal would involve industries from “cosmetics to newspapers to gym memberships.”
“Some businesses too often trick consumers into paying for subscriptions they no longer want or didn’t sign up for in the first place,” FTC Chair Lina M. Khan said in the news release.
She added that officials hope the move “would save consumers time and money, and businesses that continued to use subscription tricks and traps would be subject to stiff penalties.”
Here’s what you need to know.
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What changes are on the table for subscriptions or other services?
The FTC is proposing several changes, including:
- Businesses, retailers or other sellers would need to make canceling a subscription or other process as easy as signing up for the services. If a customer signed up for a subscription online, they must also be able to cancel on the same website, “in the same number of steps,” the FTC said Thursday.
- Under the proposal, sellers would be allowed to show additional offers when a customer tries to cancel their subscription or other enrollment. But the seller would need to first ask the customer whether they want to hear the options.
- The proposal would task companies or other sellers to give an annual reminder to consumers enrolled in certain programs before they’re automatically renewed.
The new rules would also require businesses to disclose terms, such as when a trial period ends, the frequency of some charges and more. Businesses or others that violate the rule could be charged tens of thousands of dollars per day and per fine, according to multiple reports.
Why are officials proposing these changes?
The agency said its plans “would go a long way to rescuing consumers from seemingly never-ending struggles to cancel unwanted subscription payment plans.” That might include asking customers to cancel in person or leave them waiting on hold to speak to customer services.
President Joe Biden on Thursday tweeted that he supports the proposal, saying “Too often, companies make it difficult to unsubscribe from a service, wasting Americans’ time and money on things they may not want or need.”
FTC officials voted 3-1 to introduce the proposal. Commissioner Christine Wilson, the commission’s only Republican, opposed the measure.
These are not the first purchases that the FTC has taken aim at in recent months. The independent agency announced in December that it settled claims with Fortnite maker Epic Games over children’s privacy issues and payment systems tricking users into making unintended purchases.
Contributing: Brett Molina, USA TODAY
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