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FTC Under Lina Khan Finalizes 'Click-to-Cancel' Rule, Simplifying Subscription Cancellations

Oct 16, 2024, 02:15 PM

On Wednesday, the U.S. Federal Trade Commission (FTC), under Chair Lina Khan, adopted a final 'Click-to-Cancel' rule requiring businesses to make it as easy for consumers to cancel subscriptions and memberships as it is to sign up for them. The rule updates the existing Negative Option Rule and aims to target 'subscription traps.' It applies to retailers, gyms, and various online and offline services, affecting both B2C and B2B transactions that include subscriptions and auto-renewals. Companies must now allow consumers to cancel subscriptions through the same method they used to sign up, such as online 'click to cancel' options. This move is supported by the Biden-Harris Administration and integrates key parts of the Consumer OPT-In Act proposed by Congress members, including Senator Chris Van Hollen and Representative Yvette Clarke. The rule addresses increasing consumer complaints about the obstacles companies impose when users try to unsubscribe, simplifying the cancellation process and eliminating onerous steps previously required to end recurring charges.