The Federal Trade Commission on Thursday proposed that companies should be required to allow consumers to easily cancel paid subscriptions.
The proposed “click to cancel” rule would force companies to allow consumers to cancel an subscription via an online mechanism, assuming they also signed up online.
The FTC voted 3-1 to move forward with a formal rulemaking.
“The new click to cancel provision, along with other proposals, would go a long way to rescuing consumers from seemingly never-ending struggles to cancel unwanted subscription payment plans for everything from cosmetics to newspapers to gym memberships,” the FTC stated Thursday.
“Canceling a subscription should be easy,” Chair Lina Khan added in a separate statement joined by Commissioners Rebecca Kelly Slaughter and Alvaro Bedoya.
“To take a simple example, this would put an end to companies requiring you to call customer service to cancel an account that you opened on their website,” the FTC's three Democrats added.
The proposed rule would also limit companies' ability to change the minds of consumers who attempt to cancel subscriptions. While companies would be able to make better offers to people who try to cancel, the companies would have to first ask consumers whether they want to hear the offers.
“In other words, a seller must take 'no' for an answer and upon hearing 'no' must immediately implement the cancellation process,” the FTC stated.
The proposed rule comes around 18 months after the FTC said in a policy statement that companies should provide consumers with “easy and simple” cancellation tools.
“Marketers should provide cancellation mechanisms that are at least as easy to use as the method the consumer used to buy the product or service in the first place,” the FTC stated at the time.
As of March 2021, most U.S. newspapers required consumers to call a telephone number in order to cancel subscriptions, according to Neiman Lab.