Government Working to Punish Companies That Make It Hard to Cancel Subscriptions

Get 'em!

Subscription Breakers

Tired of those pesky subscriptions that sound like a great deal, but make it incredible difficulty to cancel? That practice may become punishable by law, thanks to a new Federal Trade Commission (FTC) rule proposal that just dropped.

In a press release, the FTC said that its new "click to cancel" rule will require sellers to "make it as easy for consumers to cancel their enrollment as it was to sign up" — and will be applicable to gym memberships and subscription services, too.

"Some businesses too often trick consumers into paying for subscriptions they no longer want or didn’t sign up for in the first place," FTC Chair Lina M. Khan said in the release. "The proposal would save consumers time and money, and businesses that continued to use subscription tricks and traps would be subject to stiff penalties."

Type Option Negative

Part of an ongoing update process to its Negative Option Rule that was signed into law in 1973, the "click to cancel" rule would not only change the game on aggressive subscription services, but would also have a provision that returns money to affected consumers, too.

This sort of tit-for-tat rule — which will need to undergo a review process and be signed into law — will require businesses to let consumers cancel their subscriptions in whichever medium they used to sign up, be it online, in-person, over the phone, or via snail mail, which apparently some people still do.

Repeat offenders would be subject to "stiff penalties," the press release states, although it didn't go into detail about what those penalties would be.

Pitch Perfect

While it won't outright bar the practice of customer service associates trying to dissuade consumers from canceling by offering discounts or other perks, it will severely limit it, the release notes.

"Before making such pitches, sellers must first ask consumers whether they want to hear them," the press release notes. "In other words, a seller must take 'no' for an answer and upon hearing 'no' must immediately implement the cancellation process."

As Ars Technica notes, there was one dissenting Republican on the four-person FTC board who suggested that some people "prefer and enjoy" having to haggle when ending their subscriptions — but thankfully, she was overruled.

More on government rules: Scientists Discover That Toilet Paper Contains Toxic "Forever" Chemicals