FTC seeks to ban subscriptions that are challenging to cancel

Some subscriptions are simple to start but extremely difficult to end. To put a halt to such, the Federal Trade Commission is working. The “click to cancel” regulation, which would force merchants to make it as simple for customers to cancel enrollment as it is to sign up, was suggested by the FTC on Thursday. FTC Commissioner Lina M. Khan stated in a statement that “some businesses too often trick consumers into paying for subscriptions they no longer want or didn’t sign up for in the first place.” Thanks to the idea, consumers would save time and money, while companies that continued exploiting subscription scams would face harsh penalties.

FTC claims that user must receive full amount after cancelling the subscription

Thousands of consumers complain to the FTC each year about being unable to cancel services, frequently with cable and gym companies. More people endure silent suffering. The idea would compel businesses to alter their subscription practices in several ways. They would first need to make it possible to end a subscription like it was started. To put it another way, if you can sign up for anything online, you should be able to cancel it in the same amount of steps on the website.

Credits: Yahoo Life UK

Companies could make adjustments and other offers to customers when they start the cancellation process for their membership, but once they receive a “no,” they would have to cancel the subscription. Also, customers would get a yearly reminder before their subscription is automatically renewed. After then, there will be a 60-day window for public discussion. The FTC approved the proposal by a 3-1 margin.

Virginia imposes civil fines of $5,000 for each violation

Those who start paying for subscriptions to The New York Times, fitness centres, cable television, and many other services find it a constant annoyance. That most certainly includes grievances for well-known services like Amazon Prime, which was forced to streamline its cancellation procedure in the EU last year due to regulatory pressure. Khan predicted that non-commercial services like recurring political donations, which have also made some contributors feel duped and conned, wouldn’t be covered.

The idea adheres to more stringent cancellation policy guidelines implemented in Europe last year. Amazon was compelled to alter its Amazon Prime service as a result. Eighteen states, according to the FTC, have their regulations on difficult-to-cancel memberships. For instance, Virginia imposes civil fines of $5,000 for each violation. The new update can be helpful to the people who normally purchase a subscription but don’t find it helpful late on.