The End of Subscription Creep: New FTC Rule Simplifies Canceling Subscriptions

The Federal Trade Commission (FTC) has finalized a new "click to cancel" rule aimed at simplifying the process of canceling subscriptions. This rule is expected to take effect by the end of the year and will apply to most "negative option" marketing practices, where consumers are automatically billed unless they explicitly opt out. The average consumer currently spends about $91 monthly on subscriptions, and the new rule is designed to reduce the financial burden of unwanted services. FTC Chair Lina M. Khan emphasized that the rule will eliminate deceptive practices that make it difficult for consumers to cancel subscriptions. The rule mandates that businesses must provide clear disclosures and obtain informed consent before charging for subscriptions. Additionally, there must be a straightforward mechanism for consumers to cancel subscriptions and stop charges immediately. Retailers that fail to comply with the new regulations will face civil penalties. The FTC has noted a rise in consumer complaints regarding unwanted subscriptions and the difficulty in canceling them, highlighting the need for increased transparency and consumer protection. The rule is part of a broader initiative by the Biden administration to ensure that canceling a service is as easy as signing up for one.

- The FTC's "click to cancel" rule simplifies subscription cancellations.

- The rule targets "negative option" marketing practices.

- Consumers currently spend an average of $91 monthly on subscriptions.

- Businesses must provide clear disclosures and obtain consent before charging.

- Non-compliance with the rule will result in civil penalties for retailers.