A new proposal by the Federal Trade Commission aims to make canceling subscriptions easier for consumers. The “Click to Cancel” provision requires businesses to make the process of ending a subscription as easy as signing up. In 2023, subscriptions are everywhere, and canceling them is often a hassle. The FTC’s new provision would affect everything from magazine and newspaper subscriptions to fitness centers.
Canceling subscriptions shouldn’t require jumping through hoops.
“Some businesses too often trick consumers into paying for subscriptions they no longer want,” said FTC Chair Lina M. Khan. “[Under the proposal] businesses that continued to use subscription tricks and traps would be subject to stiff penalties.”
The Click to Cancel Provision requires subscription-based services to provide the same method used to sign up for cancelation. For example, if a business lets you sign up online, it must also let you cancel online. It must also allow you to do so in the same number of steps.
Additionally, if the business wants to pitch the consumer new deals upon cancellation, they must ask permission first. And if the answer is no, they must immediately end the subscription. Finally, and importantly, any service that offers anything but physical goods must provide an annual reminder before automatic renewal.
The provision aims to combat “dark patterns” in user interfaces.
According to CNN, techniques in digital interfaces that trick consumers, called “dark patterns,” have recently come under FTC scrutiny. These dark patterns fool people into giving up personal information or even unwantedly spending money. The FTC recently fined Fortnite creator Epic Games for deceiving its young player base into making purchases with dark patterns. Additionally, the Federal Trade Commission is investigating Amazon over these nefarious methods.
The Verge reports violations of the proposed Click to Cancel provision could result in fines of up to $50,000. Additionally, consumers could file lawsuits for damages for wasted time and lost money. “We’ve seen over the last few years […] a shift that companies are making […] to subscription models,” Khan said. “The shift to greater subscriptions has created more opportunity for mischief.”
