The Federal Trade Commission has made it easier for consumers to cancel subscriptions. In a decision that went along party lines, the agency voted Confirm “Click to cancel”. This rule would require providers to make canceling a subscription as easy as signing up for a subscription. It was first offered last yearregulations prohibit companies from misrepresenting their recurring services and memberships, or from disclosing any important terms associated with these offers.
“Too often, companies make people jump through endless hoops to unsubscribe,” said chair Lina Khan. “The FTC’s rule will end these tricks and traps, saving Americans time and money. “No one should be stuck paying for a service they no longer want.”
After reviewing more than 16,000 comments on the issue, the FTC decided not to write a final rulemaking as originally proposed. Most notably, the agency rescinded a proposal that would have required companies to provide annual reminders to consumers to renew subscriptions. It also wouldn’t mandate a rule that would force sellers to get the consent of those who want to cancel their subscriptions before telling them of potential changes to their plans or reasons for continuing to pay for the service.
No American should have to worry about being tricked into buying subscriptions and memberships or being held against their will.
Today, my Administration is taking steps to ensure people don’t have to jump through hoops to cancel them. https://t.co/3TJFi362vh
— President Biden (@POTUS) October 16, 2024
A separate statement by Commissioner Rebecca Slaughter (PDF link) provides information about the decision. Basically, the agency felt that the FTC Act did not authorize it to require a renewal notice. Let me note here that a different opinion (PDF link), written by Republican Commissioner Melissa Holyoak, argues that the entire rulemaking is overly broad and accuses most Democrats of trying to change it before next month’s election.
“Americans understand the importance and value of such a demand; “Many have discovered that they or their parents have been paying for years or even decades for completely unused service, such as dial-up Internet service from the 1990s,” Slaughter wrote in his statement. “… Of course, we are always mindful that our rulemaking authority under section 18 of the FTC Act is limited; sometimes, as here, these limitations prevent us from codifying in practice a rule that we would prefer to explicitly require as a matter of policy.
Slaughter notes that state and federal legislatures have the power to mandate renewal notices, noting some states, such as Virginiathey even went this way recently. “The interpretive record generated during this rulemaking process strongly supports the wisdom of federal and state legislators carefully considering the adoption of such a law,” Slaughter wrote.
Provided there are no legal challenges to the FTC’s decision, today’s rules will take effect 180 days after they are published in the Federal Register. When the agency moves prohibit non-compete clauses federal judge in Texas earlier this year issued a nationwide directive. This decision is still at the legal level.
