Canceling a service, whether it’s a cable TV subscription, streaming service or a gym membership, is typically a lot more complicated than when you initially signed up. Now the Federal Trade Commission wants to change that, and a hearing today to get public feedback on a “click to cancel” provision it wants to roll out to make canceling much easier.
If approved, these new rules would force cable TV companies and other companies to make canceling as easy as it was to sign up.
The proposal, if approved, could make it far easier for customers to leave a service they’re not satisfied with or no longer using. While some business have made strides in making it easier to cancel their account, there’s a vast inconsistencies. Some companies, for instance, require you to call a customer service line and go through a long wait process, while others require you to show up with ID. The “click to cancel” provision aims to make leaving a service as easy as signing up for one.
The provision would require companies to offer an online way to cancel a service if they signed the customer up online in the first place, and the process needs to be the same number of steps. It also requires that companies ask a customer looking to cancel if they want to hear additional offers. Lastly, companies offering services need to warn customers if an automatic renewal for an annual program is coming up.
“Some businesses too often trick consumers into paying for subscriptions they no longer want or didn’t sign up for in the first place,” said FTC Chair Lina M. Khan in a statement issued in March. “The proposed rule would require that companies make it as easy to cancel a subscription as it is to sign up for one. The proposal would save consumers time and money, and businesses that continued to use subscription tricks and traps would be subject to stiff penalties.”
Businesses, however, are likely to put up a fight and justify the need for those longer processes. The International Franchise Association, TechFreedom, the Performance Driven Marketing Institute, NCTA – The Internet & Television Association, FrontDoor, and the Interactive Advertising Bureau are among the groups that have specifically asked to contribute to the hearing.
The hearing is now underway by Securities and Exchange Commission Administrative Law Judge Carol Fox Foelak.