The Federal Trade Commission announces the final rule for 'click to cancel' to make it easier for consumers to cancel paid subscriptions
The Federal Trade Commission (FTC) of the United States announced the final rule on ' click-to-cancel, ' which will allow consumers to easily cancel paid subscription plans and memberships, on Wednesday, October 16, 2024. The rule will come into effect 180 days after publication in the Federal Register.
Federal Trade Commission Announces Final “Click-to-Cancel” Rule Making It Easier for Consumers to End Recurring Subscriptions and Memberships | Federal Trade Commission
Negative Option Rule: Final Rule | Federal Trade Commission
https://www.ftc.gov/legal-library/browse/federal-register-notices/negative-option-rule-final-rule
As online digital services become more widespread, there are more and more cases where products are offered as monthly or yearly subscriptions rather than one-time purchases. However, while these paid subscriptions are easy to sign up for, consumers have complained that the cancellation procedures are very complicated and difficult to cancel.
For example, Adobe, which offers multiple paid subscription plans in the form of Creative Cloud, was sued by the FTC in June 2024 for making it very difficult for consumers to understand how to cancel their subscriptions, which was deceptive.
FTC sues Adobe for misleading its users about its difficult to cancel subscriptions - GIGAZINE
The final rules announced today are the result of a review of rules that has been underway since around August 2024, led by the Biden administration.
Federal Trade Commission proposes rules to make it easier to cancel subscriptions - GIGAZINE
'We are modernizing this rule to combat unfair and deceptive practices related to subscription, membership, and other recurring payment programs in an increasingly digital ecosystem where it is easier than ever for companies to sign up consumers for their products and services,' the FTC said.
The final rule prohibits the following practices with respect to negative options , including subscriptions and memberships:
• Misrepresenting material facts when selling products and services with negative options.
• Failing to clearly and conspicuously disclose material terms prior to obtaining consumers' billing information in connection with negative options.
-Failing to obtain explicit consent from consumers before charging them for negative options.
- Not providing an easy mechanism to cancel a negative option and immediately stop charges.
The final rule was passed by a vote of 3 to 2 by FTC Commissioners. Commissioner Melissa Holyoak, who voted against the rule, issued a statement (PDF file) arguing that 'because 'unfair and deceptive practices ' are not specifically defined, this final rule does not meet legal requirements and could harm consumers and competition.'
'Too often, companies make consumers jump through endless hoops just to cancel their subscriptions,' FTC Chairman Lina Khan said. 'Our rules will put an end to these tricks and traps, saving Americans time and money. No one should be forced to pay for services they no longer want.'
Related Posts:
in Web Service, Posted by log1i_yk