The Federal Trade Commission (FTC) has proposed a new rule that would see companies offer an easier click-to-cancel option.
The proposal aims to reduce the deceptive or unfair practice of recurring charges that are difficult to cancel. This comes as more companies introduce subscriptions and membership programs to increase or supplement their revenue.
Consumers who sign up for multiple recurring payments often find it hard to follow up with each company’s complicated subscription canceling process. For instance, companies that only allow call-to-cancel require customers to track down a hard-to-find phone number before calling the company. Consumers also have to listen to long sales pitches before they can opt out.
At the beginning of the year, the Consumer Financial Protection Bureau (CFPB) warned companies against automatically renewing subscriptions without consent. CFPB Director Rohit Chopra believes that consumers should never worry about marketing trials.
The FTC is currently accepting public comments on the proposed rule before implementation. Anyone looking to weigh in on the subject should submit their comment within 60 days after March 23.
The Benefits
The "click to cancel" rule will be a significant step forward in consumer protection. According to a recent survey by C+R Research, many people have trouble keeping track of recurring subscription charges. The study found that around 74% of respondents easily forget about these charges, and 42% said such forgetfulness could result in individuals unknowingly paying for monthly subscriptions they no longer use.
As such, the "click-to-cancel" provision would reduce the hassle of canceling subscriptions, making it more likely that people will end unwanted payments. Some of the requirements that the rule would impose on sellers include:
Disclosure of all subscription-related information, including frequency, date, amount, and recurring payment cancellation options.
Provide a simple cancellation method, such as “click-to-cancel,” for all online initiated subscriptions.
Get a consumer's consent before advertising available additional offers while They are trying to cancel their subscription.
Annually reminding consumers of their subscriptions, especially those that don't involve delivering physical products.
Tracking Your Subscriptions
If you've been seduced into free trials that turn into huge recurring charges, you probably want to know how to get out of those too-good-to-be-true deals. Here are some ways to manage your subscriptions.
Understand what you’re signing up for
Take time to read the terms and conditions of the services you’re subscribing to. Find out:
- The length of the trial period
- Cancellation procedures
If the cancellation procedures seem hard to understand, avoid buying.
Be keen on pre-checked boxes
Companies sometimes check boxes that allow them to charge you even after the trial period. During sign-up, uncheck such boxes.
Set reminders
Reminders let you take note of crucial due dates so you can cancel your subscriptions on time. You can use a calendar, email, or reminder application to set reminders for all your recurring purchases.
Check your bank statements
Do you have any charges that you aren’t aware of? If so, immediately contact your service provider to cancel the subscription.
Request an auto-renewal notice
A renewal message is a reminder that your subscription is about to expire. It lets you know you will be automatically charged when your subscription expires.
Create a list
Make a list of all the subscriptions you have signed up for, including:
- Names
- Billing cycles
- Cost
Use subscription management apps
Several management applications let you keep track of your subscriptions. These apps can:
- Cancel unwanted subscriptions
- Send you alerts when a payment is due
- Negotiate lower prices on your behalf
The "click-to-cancel" provision has the potential to be a game-changer for consumers. If implemented, it would reduce the hassle of canceling unwanted subscriptions and provide greater transparency in the subscription process.
0 Comments