The US FTC just dealt a deathblow to bad gyms and skeevy subscription services with a new 'click to cancel' rule
In a win for the open internet, earlier this year the United States FCC restored net neutrality, an unfortunately rare example of the US enacting the sorts of consumer rights protections that the EU has rolled out consistently in recent years. Now the US Federal Trade Commission is following suit with a welcome regulation of its own—specifically what it calls “a set of common-sense revisions to the Negative Option Rule, now known as the Rule Concerning Recurring Subscriptions and Other Negative Option Programs.”
That’s convoluted government speak for ‘it’s going to be easier to unsubscribe from things now.’
“Negative option” refers to a form of recurring billing that has long been bad news for consumers—stealthy automatic renewals and free trials that hide pricey fees in the fine print. “Problematic negative option practices have remained a persistent source of consumer harm for decades, saddling shoppers with recurring payments for products and services they never intended to purchase or did not want to continue buying,” the FTC said when it proposed this rule.
These days most of us maintain a tangled nest of monthly subscriptions—Spotify, Netflix, Game Pass, and so on and so forth—and it’s not always a guarantee that they’ll make unsubscribing quick or easy. Last year I paid up-front for a year’s access to unlimited screenings at Regal Cinemas, since I live within walking distance of a theater and seeing just a couple movies a month would cover the fee. When the year was nearly up I was pretty annoyed to discover I had to email a support address to end my subscription—there was no cancel button anywhere in the Regal app or on its website. I was even more annoyed when the service auto-renewed on me several days early, almost as if snagging that extra month’s fee before people like me moved to end their subscription was a deliberate strategy.
That sort of practice would likely be in violation of the FTC’s new rule, which demands services “include a simple way for people to cancel.”
“That means people have to be able to find your cancellation method quickly and easily,” the FTC states. “It should be offered through the same medium (online, phone, etc.) people used to sign up, and it shouldn’t be overly burdensome.” No-nos include forcing people to talk to a representative to cancel or charging extra for cancelation by phone. It also discourages obfuscating any information at sign-up, like the duration of a free trial, hidden fees, and so on: “All this information should be clear, conspicuous, and available to your customers before they enroll. And certain key information related to charges and cancellation must appear right when and where the customer agrees to the negative option, every time.”
Some parts of the new regulation go into effect in 60 days, while others won’t land for 180 days. Hopefully it will mark a noticeable change in how easy it is to dump services (and gyms) that seem designed around the idea that we’ll keep giving them money forever if subscribing is just enough of a pain in the ass.
