Subscription and membership cancellations are about to become as easy as signing up.
The Federal Trade Commission (FTC) plans to implement regulations in about six months that will require businesses such as retailers and gyms to allow customers to easily cancel memberships online with just a click, according to reports from Bloomberg and the BBC on the 16th.
Under the new rules, businesses will no longer be allowed to force customers to cancel memberships through chatbots or third-party agencies when they originally signed up via an app or website.
Customers will also be given the option to cancel memberships by phone or online if they initially signed up themselves.
In addition, before extending subscription periods or converting free trials into paid memberships, businesses must obtain customer consent.
One of the primary sources of disputes between companies and consumers is that many subscription services automatically renew after a certain period, with fees or membership charges applied without adequate notification to consumers.
Canceling subscriptions and memberships has become one of the most common areas of consumer complaints in the U.S. FTC Chair Lina Khan pointed out, "Businesses too often make it nearly impossible for people trying to cancel their subscriptions."
Chair Khan emphasized that the new FTC regulations will "eliminate these tricks and traps, saving Americans time and money. No one should be stuck paying for services they don't want."
A 2021 survey revealed that it takes consumers an average of about three months to cancel unnecessary subscriptions. Last year, the FTC sued Amazon, the world’s largest e-commerce company, for deceiving customers into signing up for its paid Prime membership program and making it difficult to cancel, thus violating the relevant laws.
The FTC also took legal action against major U.S. software company Adobe for similar practices.
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