FTC's New Click-To-Cancel Rule Is A Killshot For Convoluted Subscription Cancellations

Are you familiar with the concept of "negative option marketing"? It refers to a class of customer interaction where a customer's failure to take an affirmative action, such as denying an offer, is taken as assent to be charged for services or goods. It's like if I came by and shouted "cut your grass for a thousand bucks?!" outside your house, and then sent you a bill when you didn't answer.

This type of thing has been heavily regulated by the US' Federal Trade Commission since the initial establishment of the 'Negative Option Rule' way back in 1973, but said rule has been amended many times since as clever cheaters devise new ways to deprive hard-working Americans of their dollars. The latest amendment has actually changed the name of the rule, which is now known as the 'Rule Concerning Recurring Subscriptions and Other Negative Option Programs.'


You see, subscription services fall under the umbrella of 'negative options' because the customer must take specific action to cancel the subscription. More respectable merchants, like Amazon, make it very easy to do so—save for perhaps a nag screen begging you not to cancel. Less respectable merchants, like Microsoft, put up onerous requirements for canceling active subscriptions, sometimes going so far as to make users call in to live support or even send in paper mail to cancel their subscription.

Well, all of that is probably illegal thanks to the new "Click to Cancel" rules promulgated by the FTC today. Under the new rules,

• Important information must be truthful clear, and easy to find.
• People have to know what they're agreeing to before they sign up.
• Sellers have to be able to show that people knew what they agreed to before they signed up.
• There always has to be a way to cancel that's as quick and easy as it was to sign up.
• Violators can be liable for civil penalties and legal redress.

Strictly speaking, the new rules don't go into effect until 180 days from today, so companies aren't caught blindsided by the new regulations. We can hopefully expect some changes in subscription service sellers' practices sooner than later. Of course, laws are only effective when people follow them, and frankly speaking, many of the unscrupulous service operators likely to be affected by this new rule may not care about the possibility of civil penalties.