The Federal Trade Commission (FTC) has announced a final click-to-cancel rule that is set to require sellers to simplify how consumers cancel their recurring subscriptions and memberships. Following the receipt of over 16,000 comments from the US public, the Federal Trade Commission introduced a final click-to-cancel regulation that demands sellers support consumers in ending their recurring subscriptions and memberships.

The regulator mentions that the majority of the final rule’s provisions are set to take effect 180 days after it is published in the Federal Register. Back in January 2023, the Consumer Financial Protection Bureau also addressed patterns and other tricks companies leverage to confuse and deceive individuals enrolled in subscriptions. The regulator issued a circular affirming that companies providing negative option subscription services needed to comply with federal consumer financial protection law.

Simplifying subscription cancellation When commenting on the announcement, representatives from the Federal Trade Commission underlined that many times, businesses force consumers to go through a complex process just to cancel a subscription. The regulator’s law aims to end these tricks and traps, saving US individuals both time and money. The fact sheet provided by the Federal Trade Commission highlights that the rule supports it in refunding people who are misled and addresses issues such as sellers who are not truthful or leave out the necessary information, individuals who get billet even if they did not agree to pay, as well as companies who make it hard, or nearly impossible, to cancel.

The Federal Trade Commission amended Negative Option Rule includes: Important details must be truthful, clear, and easy to find; Individuals have to be informed about what they are agreeing to before they sign up; Sellers are required to be able to show that customers knew what they agreed to before they signed up; A method of cancellation that is as quick and easy as it was to sign up for a service; Violators can be liable for redress and civil penalties. Moreover, the updated rule is set to apply to the majority of negative option programs in any media, forbidding sellers from misrepresenting any material facts while leveraging negative option marketing. The final rule comes as part of the Federal Trade Commission’s ongoing review of its 1973 Negative Option Rule, which the organisation is modernising to combat unfair or deceptive practices related to subscriptions, memberships, and other recurring payment programs.

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