FTC finalizes click-to-cancel rule for subscription fees

The Federal Trade Commission on Wednesday adopted a final rule requiring businesses that sell subscriptions to make canceling as straightforward as signing up. Starting next spring, the rule will also require businesses to intentionally inform consumers when using features like automatic renewals or continuity plans. The new rule will save Americans time and money by eliminating obstacles that businesses put around canceling a subscription, commission Chairwoman Lina M. Khan said. The number of complaints to the FTC about recurring subscription practices has steadily increased in recent years, according to an FTC statement. The rule won’t take effect until mid-April.

Will companies need year-to-year consent before renewing subscriptions? No. A provision requiring services to give customers annual reminders of their subscription renewal was included in the rule’s original draft but was removed in response to public input. The FTC also added a section barring companies from trying to convince consumers to keep or modify a service when they seek to cancel. The rule will also require companies to clearly disclose their terms before getting a customer’s billing information when entering into a paid subscription feature.

Dig Deeper: Read Josh Schumacher’s report on the push for click to cancel earlier this year.