FTC's New Rule: Say Goodbye to Tricky Subscriptions

Ever subscribed to something only to find it wasn't at all what you thought and then had to fight to end the subscription? Yeah, those days are almost over.

On Wednesday, the FTC announced that it has approved a final "click-to-cancel" rule that will make subscriptions more transparent but also easier to cancel if you still end up with something that you weren't expecting. The ruling has a four-part framework designed to help prevent deceptive advertisements for subscriptions and situations where sellers make it almost impossible to cancel a subscription.

The four parts essentially prevent misrepresentation, force sellers to disclose terms of a subscription, make them get your express consent before you're charged, and require them to provide a simple mechanism for canceling your subscription.

Unfortunately, a couple of points that would have made the process even clearer were not included in the ruling. The FTC opted not to require companies to send annual reminders of active subscriptions and it chose to allow companies to try to convince you to keep your subscription if you are trying to cancel.

So, what does this all mean? It comes down to making subscription options clearer. Once in effect, subscription sellers will have to be clearer about what you're subscribing to as well as when and how you will be charged for the subscription. But, they can still try to convince you to stay if you decide you don't want the subscription. Also, it doesn't appear that subscription refunds were addressed, so if you subscribe to an annual subscription and find that you don't want it, it's likely that the seller can have a "no refunds" policy that means you won't get your money back, even if you do cancel the subscription.

Either way, you should always read Terms of Service documents and other information related to subscription with close attention before you click the Subscribe button.