Quitting a gym can be just as intimidating and difficult as Chandler Bing makes it out to be on Friends. Picking up the phone to cancel an e-commerce loyalty program? Well, there goes the rest of your day. Canceling a streaming subscription or fitness/wellness membership is a headache and a half—it’s a tale as old as time. But not anymore, thanks to a new rule passed by the Federal Trade Commission (FTC) called “click-to-cancel.”
On Oct. 16, the FTC approved a “click-to-cancel” provision, which requires businesses (both in-person and online) to make it just as easy for consumers to cancel their memberships as it was to first enroll. This comes on the heels of the FTC receiving more than 16,000 complaints from consumers about having to “jump through hoops online to find out where to cancel,” BBB National Programs’ National Advertising Division vice president Laura Brett told CNN.
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The agency also heard stories from consumers about their cancellation status being withheld unless they visited the establishment in person to cancel. According to Brett, the process of ending a membership, for whatever reason, has gotten severely out of hand. “Other times they might’ve been able to sign up online, but in order to cancel they had to call and talk to a representative,” she added.
As for the new rule, the FTC says consumers should be able to cancel memberships in one of two ways, at a time of choice.
If you sign up for a digital streaming service (like Spotify or Netflix), you should be able to “click to cancel” within your account—without the help of a representative. If you enrolled face-to-face (like at a gym or fitness class studio), you should be able to cancel your membership online or on the phone—without having to make an in-person visit.
“Too often, businesses make people jump through endless hoops just to cancel a subscription,” FTC commission chair Lina M. Khan said in a statement. “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.”
Additionally, the “click-to-cancel” rule will address other membership/subscription concerns. The rule will restrict companies from using language that could misrepresent the product or service and require sellers to provide pertinent information before asking for billing information, including payment. The latter will affect free trial marketing campaigns, in which companies may automatically bill customers at the end of a free trial without consent.
“The rule makes it clear that it has to be as easy to cancel a subscription as it is to sign up,” Brett explained to CNN. “That means it’s got to be easy to find where to cancel and how to cancel, and that you never have to interact with a live person in order to cancel the subscription.”
The new rule will go into effect 180 days after it is published in the Federal Register. It will span everything from fitness memberships and shopping loyalty programs to streaming services and cable TV packages.
