The Federal Trade Commission today announced a final 'click-to-cancel' rule that requires sellers make it as easy for consumers to cancel their subscription as it was to sign up. The rule's provisions will go into effect 180 days after being published in the Federal Register.
"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."
The final rule announced today is part of the FTC's ongoing review of its 1973 Negative Option Rule, which the agency is modernizing to combat unfair or deceptive practices related to subscriptions, memberships, and other recurring-payment programs in an increasingly digital economy where it's easier than ever for businesses to sign up consumers for their products and services.
The rule also will prohibit sellers from misrepresenting any material facts while using negative option marketing; require sellers to provide important information before obtaining consumers' billing information and charging them; and require sellers to get consumers' informed consent to the negative option features before charging them.
The final rule will provide a consistent legal framework by prohibiting sellers from:
● 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; and
● failing to provide a simple mechanism to cancel the negative option feature and immediately halt charges.
The Commission vote approving publication of the final rule in the Federal Register was 3-2, with Commissioners Melissa Holyoak and Andrew N. Ferguson voting no. Commissioner Rebecca Kelly Slaughter issued a separate statement and Commissioner Holyoak issued a separate dissenting statement. Commissioner Ferguson's dissenting statement is forthcoming.
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"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."
The final rule announced today is part of the FTC's ongoing review of its 1973 Negative Option Rule, which the agency is modernizing to combat unfair or deceptive practices related to subscriptions, memberships, and other recurring-payment programs in an increasingly digital economy where it's easier than ever for businesses to sign up consumers for their products and services.
The rule also will prohibit sellers from misrepresenting any material facts while using negative option marketing; require sellers to provide important information before obtaining consumers' billing information and charging them; and require sellers to get consumers' informed consent to the negative option features before charging them.
The final rule will provide a consistent legal framework by prohibiting sellers from:
● 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; and
● failing to provide a simple mechanism to cancel the negative option feature and immediately halt charges.
The Commission vote approving publication of the final rule in the Federal Register was 3-2, with Commissioners Melissa Holyoak and Andrew N. Ferguson voting no. Commissioner Rebecca Kelly Slaughter issued a separate statement and Commissioner Holyoak issued a separate dissenting statement. Commissioner Ferguson's dissenting statement is forthcoming.
Read More