Hailey Whitlock, Staff Writer 

On Oct. 16, 2024, the Federal Trade Commission (FTC) announced the final version of the “Click-to-Cancel” subscription rule which was first formally proposed by the Federal Trade Commission in March of 2023. The rule seeks to change the difficulty consumers experience with canceling subscription services. Often, consumers lament the current subscription business model due to the fact that companies are often misleading in the information they provide and make canceling a subscription much harder than joining one. In an interview conducted by NPR, Sam Levine, the head of the Consumer Protection Bureau at the Federal Trade Commission explained of the companies, “They know exactly what they’re doing. They’re using some of the most sophisticated design techniques available to trap people in these subscriptions and manipulate them.” 

When questioned about the need for such a rule, the Federal Trade Commission Chair Lina Kahn summarized the call for change as follows: “Too often, businesses make people jump through endless hoops just to cancel a subscription. 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.” This motivation led to the regulation being passed in a sharply contested 3-2 vote consistent with party lines.

The “Click-to-Cancel rule” mandates that companies provide a cancellation method that is “easy to find when the consumer seeks to cancel,” although there was not a clear explanation of what this cancellation method would look like. According to the FTC, the rule also states that if the consumer signs up online for the subscription there must be a click to cancel option; if the consumer signs up in person, the company must provide the option to either cancel online or over the phone. For consumers required to cancel over the phone, representatives from the company must be available during normal business hours to process the request. As stated by the Wall Street Journal , consumers may no longer be forced to speak to either a live representative or chat box to cancel these memberships unless they consented to this step upon signing up for the subscription. Finally, consumers must agree before being charged and be informed if the company uses subscriptions that auto renew, prompting companies to stop automatically rolling over free trial subscriptions to paying memberships. 

Further, the policies that will primarily go into effect 180 days after the passing of the rule, attest that those in violation of the above rules and the much more ambiguous directive to avoid misrepresenting any subscription product may result in redress and civil penalties. Due to this addition, as elucidated in the Wall Street Journal, many companies are in vehement opposition to this new rule as it could be used to target marketing attempts of companies that utilize subscription services; even marketing attempts that do not relate to the methods for signing up and canceling a subscription. Consequently, this allows the Federal Trade Commission to pursue legal action against such entities, an addition that critics feel is outside the authority of the FTC.