The Federal Trade Commission (FTC) has finalized a rule that will make it easier for consumers to cancel unwanted subscriptions and memberships, The Associated Press reports.
This “click-to-cancel” rule aims to curb deceptive practices often employed by businesses to lock customers into recurring charges.
The new rule mandates that businesses clearly disclose the terms of subscriptions and obtain explicit consent before charging for memberships, auto-renewals, and programs linked to free trials. They must also make it as easy for consumers to cancel recurring subscriptions as it was to sign up. Most of the rule’s provisions will go into effect 180 days after publication in the Federal Register.
This regulation falls under the Biden administration’s “Time is Money” initiative, a broader campaign targeting consumer-related hassles across various industries. The administration announced the initiative in August, outlining plans to crack down on deceptive practices in areas like healthcare, fitness memberships, and media subscriptions.
The FTC received over 16,000 comments on the proposed rule, with input from consumers, advocacy groups, and industry associations. The final rule passed with a 3-2 vote among FTC commissioners.
The U.S. Chamber of Commerce has voiced opposition to the administration’s approach, arguing that “heavy-handed regulations” will lead to higher costs for consumers.
However, advocates for consumer protection welcome the FTC’s action. “This rule is a victory for consumers who have been frustrated by deceptive subscription practices,” stated [Name of consumer advocate], [Position at advocacy organization]. “It will level the playing field and empower consumers to make informed choices.”
This rule is part of a broader push by the Biden administration to address deceptive pricing practices, including the fight against “junk fees” which can obscure the true cost of services like concert tickets, hotel rooms, and utility bills.
