wMany people know the struggles of navigating through endless calls and confusing terms when they want to cancel a subscription or membership. Luckily, the FTC has stepped in with a new rule that aims to make the cancellation process as simple as signing up. Once this rule is officially published in the Federal Register, businesses will have 180 days to follow it. After that period, they may face consequences for any misleading actions.
Impact on Businesses
This regulation will influence nearly all companies that use Negative Option tactics. A common example is the “free trial” offer, which often asks users for their payment details before they can access the service. Under this new rule, businesses must present information about their services clearly and honestly reflect what users receive upon enrollment. Additionally, the FTC ensures that if someone signs up online, they should also have the ability to cancel online. Even if a person enrolls in a service face-to-face, they will still need the option to cancel via phone or online.
A Long-Awaited Change
This regulation has been a long time coming. Many users have found themselves paying for unwanted services simply because they forgot to cancel their subscriptions, costing them money. Ironically, this has led to companies even charging cancellation fees. It is hoped that as the FTC continues to learn about the digital economy, we will see more protective rules that keep users safe from dishonest business practices.
FTC.gov
