U.S. ‘Click to Cancel’ Rule to Tackle Subscription Traps

On Thursday, October 17th, the United States Federal Trade Commission (FTC) introduced a new “click to cancel” rule to simplify the cancellation of subscription services. The rule mandates that companies make the process of signing up for and canceling subscriptions equally straightforward. The regulation, set to take effect in approximately six months, applies to various businesses, including retailers and gyms. It also requires companies to obtain explicit customer consent before renewing subscriptions or converting free trials into paid memberships.

FTC Chair Lina Khan stated, “Too often, businesses make people jump through endless hoops just to cancel a subscription.” She emphasized that the new rule aims to end these deceptive practices, saving both time and money for American consumers. The rule prevents businesses from forcing customers to cancel through complicated means such as chatbots or agents, ensuring that subscriptions initiated online can be canceled via the same method.

In recent years, the FTC has taken legal action against companies like Amazon and Adobe for allegedly violating consumer rights with complex cancellation processes. In Amazon’s case, the FTC accused the company of tricking customers into signing up for Prime memberships that were difficult to cancel. Similarly, Adobe faced legal action for hidden termination fees and failing to properly disclose the terms of its subscriptions.

This U.S. regulation comes alongside similar efforts in other countries. For instance, the UK’s Digital Markets, Competition, and Consumers Act 2024 requires companies to clearly inform consumers about subscription terms and allow easy contract termination. These international efforts reflect a growing global trend toward protecting consumers from unfair subscription practices.

The “click to cancel” rule is part of a broader push by regulators to hold businesses accountable for deceptive practices, ensuring that consumers are not trapped in unwanted services. This regulation marks a significant step forward in consumer protection.