'Click to Cancel' Rule Could End the Cycle of Subscription Traps The Federal Trade Commission proposed a new rule that intends to make it just as easy for subscribers to cancel their subscriptions as it was to sign up.

By Madeline Garfinkle

Pheelings Media | Getty Images

Nearly everyone in the digital age has a story of a nightmare subscription that came back to haunt them. Whether it's an add-on or an upgrade, free trials are designed to be easy to opt in and difficult to opt out. Predictably, it's not an accident. Signing up for a free trial of something often takes a few minutes. To cancel, on the other hand, can feel like an endless maze to the exit.

However, the Federal Trade Commission (FTC) announced on Thursday that it intends to make it just as easy for subscribers to cancel as it was to sign up with a new "click to cancel" rule. The rule would require businesses to make enrollment and cancellation equal parts effort, rather than a lopsided system skewed towards trapping users.

"Some businesses too often trick consumers into paying for subscriptions they no longer want or didn't sign up for in the first place," FTC chair Lina M. Khan said in a statement. "The proposal would save consumers time and money, and businesses that continued to use subscription tricks and traps would be subject to stiff penalties."

Related: Subscription-based Models In the Rental Car Industry Becoming a Trend

The proposal would target three main areas:

  • Cancellation: Canceling a service would have to be the same method and number of steps as it was to sign up.
  • Additional offers: Before services or companies extend additional offers to users as they try to cancel, the business would be required to ask if the user wants to hear them. If not, the business would have to "take no for an answer," and nix any existing steps.
  • Reminders and confirmations: Businesses would be required to give an annual reminder to consumers in negative option programs (subscriptions where a consumer must take action to reject the service or cancel) before auto-renewing.

The proposed rule is part of the FTC's ongoing 1973 Negative Option Rule which cracks down on deception and unfair practices regarding subscriptions, memberships, and other recurring-payment programs.

"We've seen a dramatic growth in subscription-based business models over the last few years, which just underscores the urgency here," Khan said, per Vox. "Companies should not be able to manipulate consumers into paying for subscriptions that they don't want."

While the proposed rule would be a godsend to millions, it's still in the beginning stages and may take months to get approved, if it goes through.

Related: How Subscription Services Are Changing Brand and Consumer Habits

Wavy Line
Madeline Garfinkle

Entrepreneur Staff

News Writer

Madeline Garfinkle is a News Writer at Entrepreneur.com. She is a graduate from Syracuse University, and received an MFA from Columbia University. 

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