Have you ever noticed that subscribing to one of the best streaming services is often a lot easier than canceling? The likes of Netflix, Hulu, and HBO Max are eager to welcome you into the fold, but when you want to top off that monthly subscription, the process isn’t always the same.
The Federal Trade Commission (FTC) also spotted the problem, the government body suggests New rule (Opens in a new tab) Require that subscriptions be as easy to cancel as they are to subscribe to. Called the “click to cancel” clause, it states that if it only takes a few clicks to register, then canceling should be just as straightforward.
If this suggestion were to go into effect, it could mean the end of the dreaded “Are you sure you want to cancel?” question. checks, and it would also limit the subscription service’s ability to offer attractive counteroffers to those who want to cancel the order.
Under the rules, a service is still allowed to offer reduced or modified terms, but only after the consumer gives express permission to hear about those promotions.
Moreover, the rules also state that the ability to cancel must be available online if the customer can also opt in in the same way. This certainly won’t really affect streaming services as the vast majority of them can already be canceled online. However, it is not uncommon for subscription services such as gym memberships to allow you to sign up via a website or app but require a phone call or in-person meeting to cancel.
Annual reminder
Subscription sellers will also be required to provide customers with an annual reminder before auto-renewal. Although it is stated that this requirement will not include software that involves physical goods.
These rules echo similar provisions that have already been implemented before European Union (Opens in a new tab) They are generally designed to ensure that consumers do not end up paying for a service they no longer want.
Lina Khan, chair of the Federal Trade Commission, was quoted as saying, “Some companies often trick consumers into paying for subscriptions they no longer want or never signed up for in the first place. The proposed rule would require companies to make it as easy to opt out as it is to subscribe.” “.
The rules echo similar provisions implemented by the European Union.
Khan also noted that if the proposal goes into effect, any “companies that continue to use subscription scams and traps will be subject to severe penalties.” Although what exactly these penalties are will not be directly stated in the proposal. It is also not mentioned whether customers have any right to a refund if they have been tricked into maintaining a subscription through unfair business practices.
This FTC proposal certainly sounds like a win for consumers, and it’ll be nice to know you can sign up for a secure subscription service knowing that canceling will be just as easy. However, for now, this is just a suggestion from the Federal Trade Commission and there are several hurdles that need to be cleared before these rules can be implemented.
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