Click to Cancel

Dear Dr. Per Cap: 

I heard there’s a new law that will make it easier for customers to cancel subscriptions.  How does it work?

Signed, 

Frequent Subscriber

Dear Frequent Subscriber,

It’s not technically a law but a rule issued by the Federal Trade Commission that falls within its role to enforce the Federal Trade Commission Act.  A broad, overarching set of laws that enable the FTC to stop unfair or deceptive acts of commerce.  What’s officially called the “Negative Option Rule” but more commonly known as the “Click to Cancel” rule was issued earlier this month in response to growing numbers of consumer complaints.

Beyond that legal lingo here’s what you need to know.

For anyone who has ever opted into a subscription, auto-renewal, or free trial that converts to a paid membership you know the drill.  It’s usually a whole lot easier to sign up for a new streaming platform, a preferred e-commerce account, or a gym membership than it is to cancel if you want out later.

Hurdles such as clicking through multiple links, having to call a customer support line, or even mail a written request are enough to drive even the most patient souls to throw a smartphone through a window.

Click to Cancel seeks to end the headaches by requiring businesses to provide a simple way for consumers to end a subscription.  The rule states that the cancellation process must be “at least as easy” as signing up.

One feature of Click to Cancel says a business can’t require a customer to first communicate with a customer service agent or chatbot before canceling, unless previously agreed upon.  Moreover, if a customer must cancel over the phone, service must be available during normal business hours to handle the request.

Businesses must also “clearly and conspicuously disclose material terms prior to obtaining a consumer’s billing information in connection to the negative option feature”.  Apologies for the added legalese but this last one is especially important for anyone who has ever felt beholden to a subscription that holds their credit or debit card info.

Another interesting takeaway is that Click to Cancel doesn’t apply to non-profit organizations who maintain sustaining donors to support their fundraising efforts with monthly auto contributions.  A fact to keep in mind for all of the hardworking community development organizations and other non-profits serving Native communities.

Click to Cancel is scheduled to go into effect in the spring of 2025.  However, several industry trade groups which include cable companies, home security companies, and advertisers have already sued to block the ruling.  Obviously, they’re concerned about how an easier subscription cancellation process could impact business.

My guess is there will be more hiccups in store for Click to Cancel so stay tuned.  Provided you’re not tuned in using a subscription you want out of.

In the meantime the FTC has issued a handy Click to Cancel Fact Sheet you might want to post at your workplace, community center, or local hangout to share this information with others.

Just hope folks don’t click to cancel dear old Dr. Per Cap!