FTC 'Click to Cancel' rule makes canceling subscriptions as easy as starting them

We've all had a subscription we wanted to cancel but discovered the price of keeping it was worth avoiding the hassle. A new rule from the Federal Trade Commission will go into effect in 180 days that will make it easier for customers to cancel pesky subscriptions.

According to the release from the FTC, companies essentially have to make it as easy to cancel a subscription as it is to sign up for one. If you sign up for a subscription online, for example, you must be able to cancel it online.

"Too often, businesses make people jump through endless hoops just to cancel a subscription," said Commission Chair Lina M. 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."

There are some subscription services notorious for being impossible to get out of. You might encounter an online form that will give you a phone number to call instead of a simple "cancel" button.

Companies will often attempt to get you on the phone to incentivize you to stay with free vouchers or discounted rates. Or they'll attempt to modify your existing package rather than end business entirely.

The rule provides legal frameworks that prohibit sellers from the following:

• Misrepresenting any material fact made while marketing goods or services with a negative option feature
• Failing to clearly and conspicuously disclose material terms prior to obtaining a consumer's billing information in connection with a negative option feature
• Failing to obtain a consumer's express informed consent to the negative option feature before charging the consumer
• Failing to provide a simple mechanism to cancel the negative option feature and immediately halt charges.

Hopefully, the FTC's final "Click to Cancel" rule included in the review of its 1973 Negative Option Rule will make life a little easier for consumers. Especially since many companies have switched to subscription models in an attempt to capture guaranteed recurring revenue.