Oct. 17 (UPI) — The Federal Trade Commission announced its final “click-to-cancel” rule will go into effect 180 days after it is published in the Federal Register. The new rule is bringing cheers from consumer advocates, who long charged that companies made it too difficult to cancel products and programs online. Officials said companies have often used misleading language and countless prompts before customers can cancel a subscription.
“Too often, businesses make people jump through endless hoops just to cancel a subscription,” Federal Trade Commission Chair Lina M. Khan said in a statement. “The FTC’s rule will end these tricks and traps, saving Americans time and money. Nobody should be stuck paying for a service they no longer want.”
The agency said the new rule was created after an ongoing review of the 1973 Negative Option Rule, which the FTC is updating to fight unfair or deceptive practices related to subscriptions, memberships and other recurring payments in an increasingly digital economy.
The agency said that when companies made it easy to sign up for subscriptions and services, they did just the opposite when consumers wanted to end those services for whatever reason.
The new rule provides a “consistent legal framework” by prohibiting sellers from misrepresentations in signing up and canceling services, failing to obtain a customer’s “express informed consent” in connection with a negative option feature and failing to provide a simple way to cancel a subscription.
The commission approved the new rule on a 3-2 vote with commissioners Melissa Holyoak and Andrew Ferguson voting no. Holyoak argued that the new rule has more to do with politics and Khan’s support for Vice President Kamala Harris than helping customers.
“The likely unlawful character of the rule is compounded by the majority’s race to cross the finish line,” Holyoak said in a separate statement.
“Why the rush? There is a simple explanation. Less than a month from election day, the chair is hurrying to finish the rule that follows through on a campaign pledge made by the chair’s favored presidential candidate.”