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Jimmy Williams
The Federal Trade Commission (FTC) has announced a finalized rule designed to make it easier for consumers to cancel unwanted subscriptions and memberships, following a surge in complaints about confusing and time-consuming cancellation processes.
The new rule, dubbed “Click to Cancel”, ensures that if consumers sign up for a subscription online, they must also be able to cancel it on the same platform with the same number of steps. This initiative is part of the broader “Time Is Money” campaign aimed at eliminating consumer frustrations.
FTC Chair Lina Khan highlighted the growing number of complaints the agency receives regarding subscription cancellations. “We’re now getting about 70 complaints every day related to subscription cancellations, a dramatic increase from just a few years ago,” Khan said in an interview. “Over recent years, we’ve seen increasingly that some firms make it extraordinarily easy to sign up but absurdly difficult to cancel.”
The “Click to Cancel” rule is intended to combat what Khan referred to as a “doom loop,” where consumers are trapped in unhelpful automated systems or endlessly transferred between agents when attempting to cancel a service. “All people want here is some fairness and some honesty,” she said. “And that’s what this rule will do.”
The U.S. Chamber of Commerce, however, has criticized the FTC’s approach, arguing that it amounts to “micromanaging business practices.” In response, Khan stated, “At the end of the day, if a business is dependent on tricking or trapping people into subscriptions, that’s not a good business model.”
The rule is seen as a significant win for consumers, particularly those frustrated by cancellation policies. One such individual, Haley Nelson from Minnesota, shared her difficulties with canceling her Planet Fitness membership. After realizing the gym was too busy, Nelson attempted to cancel but was told she had to do so in person. “I ended up paying for months before I finally found the time to go back and cancel,” she said.
In a statement, Planet Fitness said members can cancel in person or via mail, and it is expanding online cancellation options for added convenience.
Nelson welcomed the FTC’s new rule, stating, “This is a very positive step in the right direction, just making it less easy for big companies to kind of pull a quick one on you.”
The FTC’s push comes as it also takes legal action against Amazon over its Prime subscription service, accusing the company of creating obstacles to cancellation. Amazon denies the allegations, with the case set for trial next summer.
The “Click to Cancel” rule is part of a broader effort by the Biden administration to crack down on consumer-oriented hassles, reinforcing the importance of transparency and ease of use in modern business practices.
