Canceling Subscriptions Is Hard but the FTC Wants to Make It Easier

A 'click-to-cancel' rule would make unsubscribing painless

  • The FTC wants to make it easier to cancel subscriptions. 
  • A proposed rule would require businesses to let users cancel on the same website in the same number of steps it took to sign up. 
  • Most Americans don’t know how many subscriptions they have and underestimate the total cost.
Someone reclining on a sofa using a laptop computer.

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Breaking up can be hard to do when it comes to online subscription services, but the process could soon get simpler. 

The Federal Trade Commission (FTC) is proposing a "click-to-cancel" rule that would require companies to provide an easy way to stop those unwanted subscriptions. Experts say the measure is overdue. 

"Companies have been using every trick in the book to make it so that once you order a renewable product, whether that's a subscription to an internet service or a political donation,  you struggle to stop the constant renewals," Gary Pieples, a law professor at Syracuse University told Lifewire in an email interview. "We all have experienced paying several extra months for a product or service you no longer want or use because it's difficult to find, if not impossible, to stop the renewals."

Making It Easier to Unsubscribe

The FTC’s proposed rule would require businesses to make it at least as easy to cancel a subscription as it was to start it. For example, if you can sign up online, users must be able to cancel on the same website in the same number of steps. 

The rule would also allow sellers to offer additional services when a consumer tries to cancel their enrollment. But before making such pitches, sellers must first ask consumers whether they want to hear them. 

By making the process simpler for consumers, it will cut down on the number of erroneous charges.

Companies that violate the rule could face significant fines of $50,000 per violation. The FTC said it would also be able to help consumers who have suffered from unfair subscription practices. The agency would help customers get back money spent on subscriptions they didn't want or couldn't easily cancel.

"Some businesses too often trick consumers into paying for subscriptions they no longer want or didn’t sign up for in the first place,” FTC Chair Lina M. Khan said in the statement announcing the proposal. “The proposed rule would require that companies make it as easy to cancel a subscription as it is to sign up for one.”

The FTC said it receives thousands of complaints from consumers every year about being billed for recurring services without their permission. According to the agency, many users need help with demanding and complex cancellation policies.

The proposed click-to-cancel rule is part of the agency's review of the Negative Option Rule, passed in 1973, which requires that sellers disclose the terms of sale before consumers subscribe and provide information about how consumers can go about canceling.

The FTC will be taking public comments on the proposed rule, but it’s not yet clear when it will go into effect. 

More Subscriptions Mean Big Bills

Businesses have increasingly turned to subscriptions as a way to increase income. Revenue from subscriptions grew 300% between 2012 and 2018

Someone lounging on a sofa, trying to cancel Netflix on a laptop computer.

Rawpixel / Mockup Photos

Americans have so many subscriptions that nearly all lose track of which ones they are enrolled in, according to a survey by the consultant firm West Monroe. Of those surveyed, all said they didn't know the total cost of all their subscriptions. When asked to guess, the average was 3.4 times less than they truly paid. The 2021 survey found that, on average, consumers spend $273 a month on subscription services, up from $237 in 2018. 

The FTC's proposed click-to-cancel rule is helpful for users of different subscription-based services as many of these services are difficult to stop once they've been started, Art Shaikh, the CEO of DigitalWill.com, said in an email. 

"Older customers of subscription services like Netflix may find it difficult to cancel and will therefore end up being charged money for services they are not using," he added. "By making the process simpler for consumers, it will cut down on the number of erroneous charges."

The process of canceling subscriptions can be a confusing mess, Shaikh noted. He said some platforms make it easy to stop recurring charges, while others involve multiple steps. 

"One of the more difficult ones to cancel is SiriusXM which involves having to have a code on the radio in your car, calling a customer service representative, who is usually in the sales department, and then having to confirm via email," he added. "With the volume of subscriptions we all have, it makes sense to have a more uniform rule for cancellations."

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