Getty Images | Anna Moneymaker
Canceling a subscription should be as easy as signing up for a service, the Federal Trade Commission said in its proposed “click to cancel” rule announced today. , said if the plan is approved, “no business will ask you to call customer service to cancel an account opened on the website.”
The FTC said the click-to-cancel rule would require merchants to “make it as easy for consumers to cancel a subscription as they signed up for,” and “relieve consumers from the seemingly endless pain of cancellation.” It helps a lot,” he said. Unnecessary subscription payment plans for anything from cosmetics to newspapers to gym memberships. “
The FTC said the proposed rule would come into force with civil penalties and allow the commission to refund affected consumers.
“The proposal states that if consumers can sign up for a subscription online, they should be able to cancel online using the same procedure. If consumers can open an account over the phone, they should be able to cancel over the phone.” without endless delay,” said FTC Chairman Rina Kern. I have written.
The FTC is seeking public comment on this proposal, which includes other changes to the Commission’s 1973 Negative Option Rule. “Some companies often trick consumers into paying for subscriptions they no longer need or didn’t sign up for in the first place,” says Khan.
simple cancellation request
The proposed rule would require a simple cancellation mechanism for any medium through which consumers sign up for services, whether internet, telephone, mail, or in person. it says:
On the Internet, this “Click to Cancel” provision requires merchants, at a minimum, to provide a cancellation mechanism accessible through the same website or web-based application used to sign up. If a merchant allows users to sign up using a phone, it must at least provide a phone number and ensure that all calls to that number are answered during normal business hours. Furthermore, to meet the requirement that the mechanism be at least as simple as the one used to initiate recurring charges, calls used for cancellation should not be more expensive than calls used for registration. (For example, if the signup call is toll free, the cancel call must also be toll free). For recurring charges initiated by face-to-face transactions, sellers must provide a simple cancellation mechanism via the Internet or telephone in addition to the face-to-face method used to actually initiate the transaction.
The proposed rule also targets practices that try to discourage consumers from canceling by offering different service options. The FTC said that “sellers can pitch additional offers or modifications if a consumer attempts to cancel a subscription,” but “must first ask the consumer if they would like to hear it.” . “In other words, the seller has to take ‘no’ as an answer, and as soon as they hear ‘no,’ they have to go through the cancellation process.”
Khan said the proposal was a “digital dark pattern,” in which companies place hard-to-see buttons, hidden pop-ups, or misleading links to manipulate consumers into not canceling their subscriptions. It will also address new business tactics such as
The FTC will accept comments on this proposal for 60 days after it is published in the Federal Register. Once the comment period begins, you can submit your comments online or by email.
FTC Republican Dissent
The proposed rulemaking notice was approved by a 3 to 1 partisan vote. Republican Kristin Wilson dissented, saying that the expansion of the negative option rule “could discourage businesses from using consumer-preferred negative option features because of potential liability.” said.
Further, Wilson argued that the FTC “has no authority to seek civil penalties.” again Section 5 Cases refers to Section 5 of the Federal Trade Commission Act, which prohibits unfair or deceptive conduct.Wilson is also the Supreme Court’s AMG Capital Management A 2021 decision that said Section 13(b) of the FTC Act does not authorize the Commission to seek monetary relief.
“The law enforcement experience that consolidated a variety of legal requirements may have favored coordinated rules to address the widespread abuse of negative option marketing,” Wilson wrote. “Instead, this proposal attempts an end-run over the Supreme Court’s ruling. AMG confer again Commission Remedies and Civil Penalty Authority for Section 5 Violations Unrelated to Deceptive or Unfair Negative Option Practices. “
The FTC majority cited the powers of Section 5 of the FTC Act and the 2010 US law, the Restored Online Shopper Trust Act (ROSCA). In a statement, Mr. Khan and fellow Democrats said the proposal “is based on Article 5’s prohibition of unfair or deceptive practices. Specifically, it expands ROSCA’s simple cancellation order.” , and propose to apply it to the whole world of negative option marketing.”
The text of the proposal states that the FTC law would “issue notice of the proposed rulemaking if there is reason to believe that unfair or deceptive conduct or practices covered by the proposed rulemaking are prevalent.” I give authority to the Commission.”
