FTC Plans to Crack Down on Hard-to-Cancel Subscriptions

A new provision would force companies to make cancelling subscriptions as easy as signing up.

Cancelling a subscription could soon be as easy as signing up for one, with the Federal Trade Commission (FTC) announcing plans to pursue a formal ban on hard-to-cancel services.

If you’ve ever overstayed a free trial or tried to cancel a gym membership, you know that companies are more than happy to make signing up as easy as possible, while throwing up obstacles to cancel, despite how unpopular it is with customers.

That practice may not be around for much longer, though, thanks to a push for new rules by the FTC.

FTC Proposed Click-to-Cancel Rules for Subscriptions

Announced in a press release from the FTC, the government agency proposed a “click to cancel” provision that would require “sellers to make it as easy for consumers to cancel their enrollment as it was to sign up.”

“Companies should not be able to manipulate consumers into paying for subscriptions that they don’t want. We get countless complaints about this.” – FTC chair Lina Khan

For starters, the provision would require businesses to create a “simple cancellation mechanism,” so users could unsubscribe from services in a timely manner. On top of that, the provision would force companies to send out annual reminders that users are subscribed to a service to keep them aware of their spending.

Finally, the FTC is proposing that providers will still be allowed to offer special deals and discounts when a user opts to cancel, but that they must first ask if the user wants to see them.

Does Click-to-Cancel Help Businesses?

If you don’t think about it for too long, making it hard to cancel a subscription might seem like a good idea. After all, if it’s harder to cancel, maybe they’ll just stay customers for longer, right?

If you did think about it for a bit longer, though, you’d realize that there’s a lot more to acquiring and retaining customers than just keeping them subscribed against their will. In fact, 68% of customers decide to leave a business due to perceived indifference towards them, and a hard-to-cancel subscription will do exactly that.

The reality is that a successful business isn’t going to be one that traps customers in subscriptions they don’t want. If you really want to keep your numbers up, focusing on improving productivity is a much nobler goal than tricking your loyal audience.

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Written by:
Conor is the Lead Writer for Tech.co. For the last six years, he’s covered everything from tech news and product reviews to digital marketing trends and business tech innovations. He's written guest posts for the likes of Forbes, Chase, WeWork, and many others, covering tech trends, business resources, and everything in between. He's also participated in events for SXSW, Tech in Motion, and General Assembly, to name a few. He also cannot pronounce the word "colloquially" correctly. You can email Conor at conor@tech.co.
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