Ganesh Kendale
The US Federal Trade Commission (FTC) has adopted a ‘click to cancel’ rule, which aims to make it easier for people to end subscriptions.
It will force companies to make subscribing and cancelling subscriptions equally straightforward.
Businesses, including retailers and gyms, will also have to get consent from customers before renewing subscriptions or converting free trials into paid memberships.
The new rule is due to come into effect in around six months time.
“Too often, businesses make people jump through endless hoops just to cancel a subscription,” said FTC chair Lina Khan.
“The FTC’s rule will end these tricks and traps, saving Americans time and money. Nobody should be stuck paying for a service they no longer want.”
Under the new rule, businesses will be banned from forcing customers to go though a chatbot or an agent to cancel subscriptions that were originally signed up to using an app or website
For memberships that customers signed up to in person, businesses will have to offer the option to terminate them by calling by phone or online.
Last year, the FTC took legal action against technology giant Amazon on a related issue.
The lawsuit accused the firm of tricking customers into signing up for Prime subscriptions that renewed automatically and made it difficult for people to cancel.
It also said Amazon’s website designs pushed customers into agreeing to enrol in Prime and have the subscription automatically renewed as they were making purchases.
Amazon has rejected the claims.
