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The
“click-to-cancel” rule will prohibit retailers and other
businesses from misleading people about subscriptions and
require them to obtain consumers’ consent before charging for
memberships, auto-renewals and programs linked to free trial
offers.
The FTC said businesses must also disclose when free trials or
other promotional offers will end and let customers end
recurring subscriptions as easily as they started them. Most of
the provisions take effect effect 180 days after the rule is
published in the Federal Register, the agency said.
“Too often, businesses make people jump through endless hoops
just to cancel a subscription,” FTC Chair Lina Khan said in a
statement. “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.”
The Biden administration included the FTC's proposal as part of
its “Time is Money” initiative, a government-wide initiative
that was announced in August with the aim of cracking down on
consumer-related hassles. The initiative featured new
regulations and the promise of more for industries spanning
health care and fitness memberships to media subscriptions.
The U.S. Chamber of Commerce criticized the administration’s
approach, saying in August that “heavy-handed regulations that
micromanage business practices” will lead to higher costs for
consumers.
Vice President Kamala Harris, the Democratic nominee for
president, highlighted the “click-to-cancel” rule last month as
a policy she would pursue if elected.
FTC commissioners passed the final rule on a 3-2 vote. The
agency, which initiated the rule in March, said it received more
than 16,000 comments on the proposal, including from consumers,
consumer advocacy groups and trade associations.
The Biden administration has also targeted hidden and bogus junk
fees, which can mask the total cost of concert tickets, hotel
rooms and utility bills.
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