The Federal Trade Commission adopted a final rule on Wednesday that will require companies to make it easy for consumers to cancel unwanted subscriptions and memberships.
The “click to cancel” rule will prohibit retailers and other companies from misleading people about subscriptions and require them to obtain consumer consent before charging for memberships, automatic renewals and programs tied to free trial offers.
The FTC said companies must also disclose when free trials or other promotional offers will end and allow customers to end recurring subscriptions as easily as they started them. Most of the provisions take effect 180 days after the rule is published in the Federal Register, the agency said.
“Too often, companies make people jump through endless hoops just to cancel a subscription,” FTC Chairwoman Lina Khan said in a statement. “The FTC’s rule will end these tricks and traps, saving Americans time and money. No one should be stuck paying for a service they no longer want.”
The Biden administration included the FTC’s proposal as part of its own The “Time is Money” initiative.a government-wide initiative announced in August aimed at cracking down on consumer-related hassles. The initiative included new rules and promises of more for industries ranging from health care and fitness memberships to media subscriptions.
The U.S. Chamber of Commerce criticized the administration’s approach, saying in August that “tough rules that micromanage business practices” will lead to higher costs for consumers.
Vice President Kamala Harris, the Democratic presidential nominee, touted the “click to cancel” rule last month as a policy she would pursue if elected.
FTC commissioners adopted the final rule by a 3-2 vote. The agency, which initiated the rule in March, said it received more than 16,000 comments on the proposal, including from consumers, consumer organizations and trade associations.
The Biden administration has also taken aim hidden and fake junk feeswhich can mask the total cost of concert tickets, hotel rooms and utility bills.