Have you ever noticed that signing up for one of the best streaming services is often a lot easier than canceling? The likes of Netflix, Hulu and HBO Max are eager to welcome you into the fold, but when you want to halt that monthly subscription, the process is not always as streamlined.
The Federal Trade Commission (FTC) has spotted the issue as well, as the government body is proposing a new rule provision requiring subscriptions to be as easy to cancel as they are to sign up for. Dubbed the “click to cancel” provision it states that if it only takes a couple of taps to sign up, it must be equally straightforward to cancel.
If this proposal was to come into effect it could mean the end of the dreaded “are you sure you wish to cancel?” checks, and it would also restrict the ability of a subscription service to pitch enticing counteroffers to a a wannabe canceller.
Under the rules a service would still be allowed to offer discounted or modified terms, but only after a consumer has granted their express permission to hear these pitches.
Furthermore, the rules also stipulate that the ability to cancel must made be available online if a customer can also sign up the same way. Granted, this one wouldn’t really impact streaming services as the vast majority of these can already be canceled online. However, it’s not an uncommon tactic of subscription services such as a gym membership to allow you to signup via a website or app but require a telephone call or in-person meeting to cancel.
An annual reminder
Subscription sellers would also be required to provide an annual reminder to customers ahead of an automatic renewal. Although it's stated that this stipulation would not cover programs involving physical goods.
These rules echo similar provisions that have already been implemented by the European Union and are generally designed to ensure that consumers don’t end up paying for a service they no longer want.
Lina Khan, chair of the FTC, is quoted as saying, “some businesses too often trick consumers into paying for subscriptions they no longer want or didn’t sign up for in the first place. The proposed rule would require that companies make it as easy to cancel a subscription as it is to sign up for one.”
The rules echo similar provisions that have been implemented by the European Union.
Khan also noted that if the proposal came into effect any “businesses that continued to use subscription tricks and traps would be subject to stiff penalties.” Although exactly what these penalties would be is not directly stated in the proposal. Neither is it stated if customers would have any right to a refund if they were tricked into maintaining a subscription via unfair business practices.
This FTC proposal definitely sounds like a win for consumers, and it would be nice to know you could sign up for a subscription service safe in the knowledge that canceling will be just as straightforward. However, for now, this is just an FTC proposal and there are many hurdles to clear before these rules will be enforced.
