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Companies will soon have to make it as easy to cancel a subscription as they made it to sign up for one under a new Federal Trade Commission rule aimed at ending predatory business practices that lock consumers into paying for services they don’t want.
If you sign up for an account online, the company must provide a simple way to cancel the subscription online. If you sign up in person, you must be allowed to cancel in person or over the phone. Additionally, the rule requires companies to provide clear and truthful information to subscribers about what they’re signing up for and obtain consent before enrolling them in a negative option feature, which is a subscription model in which the customer is signed up for a service and continuously charged unless they take additional—often hidden—steps to reject the subscription.
“Too often, businesses make people jump through endless hoops just to cancel a subscription,” FTC Chair Lina 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.”
The FTC approved the new rule on a 3-2 vote. Several provisions were removed from the agency’s earlier drafts of the rule, including a requirement that sellers remind customers of their ability to opt out of a subscription annually and a requirement that sellers obtain customers’ consent before offering them additional deals in order to entice them to stay in a subscription. Most of the new rule’s provisions will take effect 180 days after it is published in the Federal Register.
Business groups seeking to kill the new rule had argued that they receive very few complaints from customers who are unable to cancel their subscriptions and that adding a simple click-to-cancel feature to websites would lead to customers accidentally canceling services they wanted. But in its announcement of the new rule, the FTC said the number of complaints it receives about difficult-to-cancel subscriptions has been on the rise, from an average of 42 per day in 2021 up to 70 per day in 2024.
Over the past several years, the agency has also sued several prominent tech companies for operating predatory subscription services. It alleged Amazon “duped” millions of people into enrolling in Amazon Prime and then used dark patterns to make it difficult to cancel those subscriptions. The FTC also accused Adobe of making it difficult to cancel its services and hiding information about early termination fees that it charged customers when they did cancel.
