HARRISBURG, Pa. — The Federal Trade Commission announced a final “click-to-cancel” rule that will require sellers to make it as easy for consumers to cancel their enrollment as it was to sign up.
“Too often, businesses make people jump through endless hoops just to cancel a subscription,” said Commission Chair Lina M. Khan. “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 final rule announced Wednesday is part of the FTC’s ongoing review of its 1973 Negative Option Rule, which the agency is modernizing to combat unfair or deceptive practices related to subscriptions, memberships and other recurring-payment programs in an increasingly digital economy where it’s easier than ever for businesses to sign up consumers for their products and services.
The updated rule will apply to almost all negative option programs in any media. The rule also will prohibit sellers from misrepresenting any material facts while using negative option marketing; require sellers to provide important information before obtaining consumers’ billing information and charging them; and require sellers to get consumers’ informed consent to the negative option features before charging them.
The FTC’s amended Negative Option Rule requires that:
- Important information must be truthful, clear, and easy to find.
- People have to know what they are agreeing to before they sign up.
- Sellers have to be able to show that people knew what they agreed to before they signed up.
- There must be a way to cancel that is as quick and easy as it was to sign up.
- Sign up online? Click to cancel
- Signed up in person? Cancel online or over the phone.
- Violators can be liable for redress and civil penalties.
Pennsylvania Attorney General Michelle Henry said, “I am pleased to see that our federal partners followed many of our recommendations, which will protect consumers in the Commonwealth and across the country. Canceling a subscription should be as easy as signing up, and, for far too long, deceptive sellers have subjected consumers to too many steps to opt out.”
The new rule will take full effect 180 days after publication in the Federal Register.
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