The Federal Trade Commission (FTC) has introduced a “click-to-cancel” rule aimed at simplifying the process for consumers to cancel subscriptions and memberships.
- The rule is designed to enable consumers to cancel recurring payments for services, including gym memberships and retail subscriptions, as easily as they can sign up for them.
The big picture: Under the new rule, if customers enroll in a subscription online or through an app in one step, they should be able to cancel it in a similar manner. This aims to eliminate obstacles and complexities often encountered when canceling subscriptions.
- Businesses will be required to provide essential information, such as free trial expiration dates, and obtain consumer consent before billing or charging them for services.
What we’re watching: The “click-to-cancel” rule is set to take effect in April 2025, and companies failing to comply could face civil penalties imposed by the FTC.
What they’re saying: “Too often, businesses make people jump through endless hoops just to cancel a subscription,” said FTC Chair Lina Khan in a statement “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.”
