The US Federal Trade Commission has proposed a formal ban on subscriptions that are easy to start but difficult to stop. It aims to make ending a subscription equally as simple as signing up for one, including allowing people to use the same method for both actions. The proposed rule also requires companies to offer up-front opt-outs that allow customers to bypass sales pitches when they try to remove a subscription, thereby preventing manipulative sales tactics. Additionally, it obliges companies to annually remind customers that they are enrolled in “negative option” programs, in which failing to cancel something is considered an agreement to continue paying for it, except for physical goods. The proposed rule offers a codified standard to determine what is unlawful and provides the FTC with greater flexibility to demand restitution from companies that violate the rule. The FTC can penalize companies around $50,000 per individual violation and can also recover damages for lost funds and potentially wasted time through consumer lawsuits. The move comes amid a shift towards subscription models, and the FTC has received countless complaints from consumers who have been unable to cancel them with ease. FTC Chair Lina Khan stated, “companies should not be able to manipulate consumers into paying for subscriptions that they don’t want.”
FTC aims to prohibit challenging gym & cable cancellations.
