In a bid to streamline the often cumbersome process of canceling services like cable TV subscriptions or streaming memberships, the Federal Trade Commission (FTC) is contemplating a “click to cancel” provision.
This initiative aims to make canceling as effortless as the initial sign-up process and is set to undergo public discussion in a virtual hearing on January 16, 2024.
The proposed provision mandates that companies offering online sign-ups must provide an equivalent online method for cancellations, with the process involving the same number of steps.
Additionally, companies would be required to inquire whether customers seeking to cancel are interested in additional offers.
Furthermore, businesses must alert customers about upcoming automatic renewals for annual programs.
The FTC believes that implementing these rules would empower consumers, offering them more control over their subscriptions and eliminating the intricate hoops currently associated with cancellation.
FTC Chair Lina M. Khan emphasized the need to prevent businesses from tricking consumers into paying for unwanted or unnoticed subscriptions.
The proposed rule not only aims to save consumers time and money but also enforces stiff penalties for companies employing deceptive subscription practices.
However, the proposal is not without opposition. Several industry groups, including the International Franchise Association, TechFreedom, the Performance Driven Marketing Institute, NCTA – The Internet & Television Association, FrontDoor, and the Interactive Advertising Bureau, have expressed their intent to contribute to the hearing.
These groups are likely to argue for the necessity of longer cancellation processes.
The virtual hearing, scheduled for 10 a.m. ET on January 16, 2024, will be presided over by Securities and Exchange Commission Administrative Law Judge Carol Fox Foelak.
The FTC plans to share a link to the hearing shortly before the event, and the outcome will significantly impact how consumers engage with and discontinue various services in the future.