Ad Group Criticizes FTC's Proposed 'Click To Cancel' Rules

The Association of National Advertisers is weighing in against several of the Federal Trade Commission's proposed “click to cancel” regulations, arguing that they “would hinder innovation and the free flow of commerce without providing commensurate benefits or protections to consumers.”

The group says in a written filing that some of the proposed regulations “would create consumer frustration and unnecessary burdens,” are “out-of-step with the ways businesses and consumers interact,” and “would impose excessive restrictions on sellers’ ability to communicate with their customer base.”

The group's comments, filed Friday, come in response to a notice the FTC issued in March regarding a set of proposed rules that aim to make it easier for consumers to cancel recurring fees -- such as subscriptions that automatically renew.

The agency stated at the time that the proposed rules “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.”

Among other proposed mandates, the potential rules would require companies to offer consumers a simple cancellation mechanism, and to allow consumers to cancel subscriptions through the same medium that was used to purchase them.

For instance, newspapers that allow people to use an online platform to purchase a subscription would also have to allow online cancellations, under the proposed rule.

Another proposed regulation would limit companies' ability to change the minds of people 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.

The FTC unveiled the proposed rules around 18 months after saying in a policy statement that companies should provide consumers with “easy and simple” cancellation tools.

The Association of National Advertisers argues in its comments that the proposed cancellation rules are both too vague and too inflexible.

“Requiring 'simple' cancellation is a difficult standard for businesses to implement, as there is little detail provided to guide them to understand its meaning and how to comply with this ambiguous requirement,” the group writes.

The organization adds that single-click cancellations will result in more frequent accidental cancellations because “consumers will not reasonably expect to remove their recurring goods or services with just one click.”

The ad group also says a requirement to offer cancellations through the same channels as subscriptions may be too restrictive in some circumstances -- such as when consumers subscribe through an “Internet of Things” device.

In those cases, “businesses may need to direct consumers to web-based interfaces to process a cancellation in order to verify the consumer’s cancellation choice,” the organization says.

The Interactive Advertising Bureau separately criticized the proposed regulations, writing that they could “hinder legitimate companies acting in good faith that offer simple cancellation mechanisms, but have failed to make their cancellation mechanism symmetrical to their sign-up experience.”

That group also argues that prohibiting companies from trying to convince people not to cancel without first obtaining their consent to hear new offers “poses serious First Amendment concerns,” because the restriction could outlaw truthful commercial speech.

The IAB also says that the proposed rule “would neither simplify nor speed up the cancellation process for consumers, because it would entail consumers having to answer a question along the lines of 'Would you like to consider a different price or plan that could save you money?'”

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