NORFOLK, Va. — The Federal Trade Commission is trying to make it easier for consumers to cancel their enrollment in subscription services.
"The FTC is receiving literally thousands of complaints every single year from people who try to cancel a subscription and can't do it," said Herb Weisbaum with Consumers' Checkbook.
The new proposed rule is called "click to cancel" and it would require companies to make it as easy to cancel a subscription as it is to sign up for one.
"So if you subscribed online, you should be able to cancel online on the same website with the same amount of clicks as it was when you signed up. If you're ordered on the phone, if you subscribed on the phone, you should be able to cancel on the phone and you shouldn't be on hold forever," said Weisbaum.
According to the FTC,
The notice of proposed rulemaking announced today is part of the FTC’s ongoing review of its 1973 Negative Option Rule, which the agency uses to combat unfair or deceptive practices related to subscriptions, memberships, and other recurring-payment programs.
These programs are widespread in the marketplace and can provide substantial benefits to both consumers and businesses.
"Some companies, this is especially prevalent with gyms and small businesses, make you either show up in person to cancel or send a certified letter to cancel, they really make you jump through a lot of hoops," said Weisbaum.
So what specific changes would be implemented in the new rule?
- Companies must make it easy to cancel a subscription
- A seller must take "no" for an answer and complete the cancellation process if a customer asks them to do so
- Sellers must provide an annual reminder before automatically renewing a subscription
While this is still a proposal, there are things you can do now to protect yourself as a consumer.
Weisbaum said to be mindful about signing up for free trials because you could be automatically signed up for a subscription whether you realize it or not.
If you do sign up for a free trial, keep track of when it expires so you're not unnecessarily charged.
Also, Weisbaum said only sign up with a credit card, not a debit card or electronic withdrawal from your checking account, so companies don't have access to your bank account, should you decide to cancel.
According to the FTC,
The Commission vote approving publication of the notice of proposed rulemaking was 3-1, with Commissioner Christine S. Wilson voting no. Chair Khan issued a separate statement, in which she was joined by Commissioners Rebecca Kelly Slaughter and Alvaro Bedoya. Commissioner Wilson issued a dissenting statement.
There is currently an open comment period where the public can weigh in and share their thoughts on the proposed rule.
