The Federal Trade Commission (FTC) is making it easier for consumers to cancel subscriptions. In a final “click-to-cancel” rule, the Commission announced it will prohibit sellers from misrepresenting facts while using negative option marketing and will require sellers to provide important information before obtaining billing details or charging customers. Sellers will also now be required to obtain a consumer’s expressed informed consent to a negative option feature before charging them and provide a simple mechanism for canceling the negative option and ending payment.
The FTC reported receiving thousands of complaints about negative option marketing and recurring subscription practices each year, steadily increasing in recent years. The goal for this rule is to prevent businesses unfairly siphoning financial gain from consumers without their knowledge or trapping them in a costly membership.
This move is part of the FTC’s efforts to modernize its attempts to combat unfair or deceptive practices related to subscriptions, memberships and recurring payment programs in today’s digital economy, and is expected to receive bipartisan support.
