Federal ‘click to cancel subscriptions’ rule is ratified (but weakened)

A “click to cancel” law was last month passed in California, and now the FTC has ratified a federal rule designed to achieve the same goal.

The idea of both is to force companies to make it as easy to cancel an online or app subscription as it is to sign up in the first place. Both were introduced in response to sketchy practices by companies designed to make it as difficult as possible to unsubscribe …

We reported last month on the Federal Trade Commission (FTC) plan to replicate California’s rule nation-wide.

The proposed rule would require businesses to make it at least as easy to cancel a subscription as it was to start it. For example, if you can sign up online, you must be able to cancel on the same website, in the same number of steps.

The FTC launched an investigation into Adobe after customers accused the company of shady practices in this area.

Federal ‘click to cancel subscriptions’ rule is ratified

The agency has now announced that the rule has been finalized.

“Too often, businesses make people jump through endless hoops just to cancel a subscription,” said Commission 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.”

It’s common for subscriptions to automatically renew unless cancelled, which the FTC refers to as “a negative option” – that is, the subscription is opt out rather than opt in annually.

The new rule imposes four conditions on all subscriptions:

• Clearly and accurately disclose all material facts
• Clearly disclose the fact that the subscription will continue until cancelled
• Get “express informed consent” to automatic renewal
• Make it as easy to cancel the subscription as it was to sign up

But it has been weakened in two ways

When originally drafted, the rule would have required companies to send annual reminders that your subscription is still active. This was intended to address the common scenario of consumers forgetting about an unused subscription. Engadget notes that requirement has now been removed.

Second, companies were to be banned from trying to persuade you to keep your subscription by listing benefits or making reduced payment offers. The thinking here is that this contradicts the idea of a one-click unsubscribe process.

This too has been removed from the final version of the rule, so companies can still make arguments and offers intended to persuade you to change your mind.

Provided there’s no legal challenge, the rule will take effect in six months.

Image: Nick Youngson/alphastockimages.com | CC3.0