This New FTC Rule Makes It Easier to Cancel Memberships and Subscriptions—Here’s What You Need to Know
It can be so easy to sign up for memberships and subscriptions. But canceling them? That’s a hassle and a half. Often you need to click through multiple screens only to be prompted to enter passwords you don’t remember setting up. Even worse is when you have to pick up the phone to canceland find out the manager you need to speak with works only on Tuesday afternoons. It’s easy to get frustrated with the process of unsubscribing (or run out of time to complete it!). The end result: You wind up paying another few months or even another year for those subscriptions.Amazon and Adobe have a reputation for making consumers’ subscriptions hard to cancel. Planet Fitness has also been put on blast for making some customers cancel in person, and its cancellation policy is made more complicated because it varies by location. That $15 gym membership sounded like a good idea on New Year’s Day, but factor in the time it takes to canceland the cost of paying for another month if you miss the deadline or don’t follow the exact processand the deal looks decidedly less sweet.But the Federal Trade Commission (FTC) is putting a stop to this. Last year, it ordered fintech company Brigit to refund $18 million to customers after its cancellation practices were ruled deceptive. Now, it has announced a “click-to-cancel” rule that’ll make canceling subscriptions as easy as signing up. “Too often, businesses make people jump through endless hoops just to cancel a subscription,” FTC Commission Chair Lina M. 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.”Read on to find out all about the rule, including how it works, when it takes effect and what you can do to easily cancel subscriptions in the meantime.GetReaders DigestsRead Up newsletter for more news, tech, travel, money, humor and fun facts all week long.What is the new click-to-cancel rule?The new click-to-cancel rule prohibits companies from having complicated cancellation policies and procedures. The official FTC announcement states that businesses must “make it as easy for consumers to cancel their enrollment as it was to sign up.” If companies don’t comply, they may face penalties.Why should you care? The average American spends about $91 per month on subscriptions, but some spend hundredsoften unwillingly. Many are stuck with subscriptions or memberships that are hard to get out of. The FTC’s ruling aims to stop unfair practices.How does it work?The click-to-cancel rule primarily works by prohibiting negative option programs. These programs have been around for decades, and we’ve all fallen victim to them at least once. Negative option programs require you to opt out to cancel a service; if you don’t, your plan continues to renew. They fall into one of four categories:Prenotification plans, like book-of-the-month clubsContinuity plans, like grocery deliveriesAutomatic renewals, like magazine or newspaper subscriptionsFree trials, often known as conversion offersThe FTC’s announcement states that the rule will also “prohibit sellers from misrepresenting any material facts while using negative option marketing; require sellers to provide important information before obtaining consumers’ billing information and charging them; and require sellers to get consumers’ informed consent to the negative option features before charging them.”When does it go into effect?According to the FTC’s announcement, the new click-to-cancel rule will go into effect 180 days after it’s published in the Federal Register.What can you do in the meantime if you need to cancel a subscription?Can’t wait that long to cancel that subscription you’re not using and don’t want to pay for? Take action now. The following tactics can help you avoid the runaround companies build into their cancellation processes.Use a subscription-cancellation tool. Because subscriptions often appear on your credit card statements under names that don’t match the product or service, they can be overlooked. Rocket Money is a great service for people who have subscriptions they may have forgotten about. It may sound too good to be true, but the company has a 4.4-star (out of 5) rating on Trustpilot and is accredited by the Better Business Bureau.Rely on a consumer credit reporting company. Experian offers a service to help you identify and eliminate unwanted subscriptions. Although the service has an upfront cost, it can help you save money in the long run.Contact your credit card company. If you’ve tried to cancel a membership or subscription but keep getting charged, reach out to your credit card company and let it know what’s going on. In most cases, it will help.While you wait for the click-to-cancel rule to take effect, remember: It’s important to read service agreements. Click “agree” too quickly, and you might find yourself in a binding contract.Why trust usReader’s Digest has published hundreds of articles on personal technology, arming readers with the knowledge to protect themselves against cybersecurity threats and internet scams as well as revealing the best tips, tricks and shortcuts for computers, cellphones, apps, texting, social media and more. For this piece on the click-to-cancel rule, Jaime Stathis tapped her experience as a longtime journalist who covers technology, scams and cybercrime for Reader’s Digest to ensure that all information is accurate and offers the best possible advice to readers. We rely on credentialed experts with personal experience and know-how as well as primary sources including tech companies, professional organizations and academic institutions. We verify all facts and data and revisit them over time to ensure they remain accurate and up to date. Read more about our team, our contributors and our editorial policies.Sources:Federal Trade Commission: “FTC Action Leads to $18 Million in Refunds for Brigit Consumers Harmed by Deceptive Promises About Cash Advances, Hidden Fees, and Blocked Cancellation”Federal Trade Commission: “Federal Trade Commission Announces Final ‘Click-to-Cancel’ Rule Making It Easier for Consumers to End Recurring Subscriptions and Memberships”Federal Trade Commission: “Negative Options Report”Bills You Shouldn't Put on AutopayHow to Stop Spam CallsHow to Save Money EverywhereThe post This New FTC Rule Makes It Easier to Cancel Memberships and Subscriptions—Here’s What You Need to Know appeared first on Reader's Digest.
Welcome to Billionaire Club Co LLC, your gateway to a brand-new social media experience! Sign up today and dive into over 10,000 fresh daily articles and videos curated just for your enjoyment. Enjoy the ad free experience, unlimited content interactions, and get that coveted blue check verification—all for just $1 a month!
Account Frozen
Your account is frozen. You can still view content but cannot interact with it.
Please go to your settings to update your account status.
Open Profile Settings