In today’s digital landscape, signing up for a service typically takes just a few clicks. But canceling them is another story. Hours spent figuring out how and where to suspend the subscription, followed by more days or even months to actually have the service suspended.
The Federal Trade Commission announced on Wednesday (16) that this is going to change. The federal government will require companies to provide a way for consumers to cancel their subscriptions as easily as signing up. The new rule applies to all types of services, from gym memberships to digital streaming and e-commerce to cable TV services.
“Often, companies make people jump through endless hoops just to cancel a subscription,” said FTC Chair Lina Khan in a statement. “No one should be stuck paying for a service they no longer want.”
The average American has about 4.5 subscriptions and pays an average of $924 per year for streaming services—the leading category, according to a survey by online payment technology company Bango.
The new rule will take effect 180 days after its publication in the Federal Register.
What will the new rule specifically require?
The FTC also noted that customers who signed up for a service online must be able to “click to cancel,” and those who signed up in person must have the option to cancel online or by phone.
It also requires companies to disclose all necessary information about the service (including plan features, deadlines, and specific costs) clearly and without distortion. Customers should know exactly what they are agreeing to before companies start charging them.
After the announcement that subscription rules would change in March of last year, the FTC received over 16,000 public comments about difficulties in canceling subscriptions.
Source: CNN