ORLANDO, Fla. — With many subscriptions, it’s easy to sign up but hard to cancel.
The Federal Trade Commission is now trying to make it just as easy for consumers to cancel as it is to sign up.
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The Federal Trade Commission is now trying to make it just as easy for consumers to cancel as it is to sign up. The FTC just approved a new rule that some refer to as the Click to Cancel rule.
Last year, Action 9 showed you the plight of former Netflix subscriber Ward Council. Council explained, “I get an email saying, ‘As you requested, your membership has been restarted.’ Which I most certainly did not.”
That was after he had already canceled the subscription.
“Well, I went on the website, canceled the account, got a nice email saying we’re sorry to see you go,” Council said.
But days later he got a welcome email showing his Nextflix account was back. He canceled again. Then a couple of days later his account was restarted. He eventually disputed it with this credit card company to stop the issue.
But the problem with cancelations goes far beyond Netflix. Since 2021, the federal government has taken action against Disney, Amazon and others with allegations of so-called dark pattern. That’s when someone who tried to cancel their subscription is led to a maze of steps.
That’s partly why in the last couple of years, the Federal Trade Commission started looking into the Click to Cancel rule. It received thousands of complaints about subscription issues.
Teresa Murray, Consumer Watchdog with U.S Public Interest Research Group, has been pushing for change.
Murray told Action 9 Consumer Investigator Jeff Deal, “A lot of it’s been tricks and nuances and traps, and people have ended up getting charged to continue a subscription that they actually didn’t even want.”
She explained the rule is designed to make it as easy to cancel as it was to sign-up. So, if a consumer just had to click a button to sign-up online, they shouldn’t have to talk to a person on the phone or chat with an online bot to cancel.
This year, the FTC has averaged 70 complaints a day about subscriptions.
Part of the new rule also forces companies to be clearer about negative option programs where if someone fails to respond, it’s seen as accepting the charges. Some examples of that are automatic renewals or automatic charges after a free trial.
FTC Commission Chair Lina Khan said, “Too often, businesses make people jump through endless hoops just to cancel a subscription. 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.”
Teresa Murray believes it will mean fewer headaches for consumers. She said, “You should be able to leave and not like what we’ve called the Hotel California, where you can check out anytime you like, but you can never leave. This has been wrong, and it’s been costing consumers billions of dollars every year.”
This applies to all kinds of subscriptions, including newspapers and gym memberships. The new rule is expected to go into effect sometime this spring.
If you have an subscription issue with a company you can report it to the Federal Trade Commission here: ReportFraud.ftc.gov
U.S. Public Interest Research Group has also set up a consumer guide on how to handle cancelations: Canceling subscriptions and memberships: How to do it properly (pirg.org)
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