FTC Finalizes "Click-to-Cancel" Rule to Combat Subscription Traps and Simplify Cancellations

Oct 16, 2024, 03:43 PM

The Federal Trade Commission (FTC) has finalized a new "click-to-cancel" rule, requiring businesses to make it as easy for consumers to cancel subscriptions and memberships as it is to sign up. Announced ahead of the November 5 election, the rule targets companies employing "subscription traps" and deceptive practices that make it difficult for customers to end recurring charges. This significant move by the Biden-Harris administration adopts key parts of the Consumer OPT-In Act proposed by Rep. Yvette Clarke and Sen. Chris Van Hollen, aiming to protect consumers, save them time and money, and is expected to save billions of dollars. The rule applies to retailers, gyms, digital subscriptions, and both B2B and B2C transactions, mandating that companies provide a straightforward cancellation process. The rule will take effect in 180 days after being published.