Dive Brief:
- The Federal Trade Commission voted last week to delay the “click-to-cancel” rule another 60 days. The FTC was scheduled to begin enforcement May 14 but will now begin enforcement on July 14.
- The amendments to the negative options rule, colloquially called “click to cancel,” are intended to make it as easy to cancel a subscription as it is to sign up for one.
- The commission voted 3-0 to delay enforcement to ensure companies had ample time to comply with the rule. The commission “determined that the original deferral period insufficiently accounted for the complexity of compliance,” it said in its decision.
Dive Insight:
The “click-to-cancel” rule is expected to be a boon to consumers as it aims to prevent subscription traps.
The rule prohibits businesses from misrepresenting the details of subscriptions with recurring payments and requires businesses to provide consumers with a simple method to halt recurring charges.
“Click to cancel” establishes a bar for ease of canceling a subscription, requiring businesses to offer the ability to cancel a subscription in the same channel a customer used to sign up for it, Forrester principal analyst Judy Weader told CX Dive.
“When we think about experience from the customers’ point of view, it doesn’t make sense for them to have call someone to cancel a subscription for a mobile app or something else they signed up for through a digital property,” Weader said in an email.
These bottlenecks cause frustration and may cause a customer to give up canceling, she said. “From the company’s perspective, that may be the point — but it’s a customer-unfriendly approach that erodes trust and reduces advocacy.”
While CX experts say the rule will improve customer experience, some businesses and business groups oppose the rule. The Chamber of Commerce and the Georgia Chamber of Commerce are suing the FTC to block the rule saying the requirements are burdensome for businesses.
Under President Donald Trump, the FTC has faced drastic changes. Trump fired two of the Democratic members in March, leaving the commission, which typically has five members, with only three Republican commissioners.
Even so, some FTC rules are being enforced, including the “junk fee” rule, which requires businesses to clearly display the total cost upfront of live-event tickets or short-term lodging. That went into effect Monday.
Weader is cautiously optimistic the “click to cancel” rule will follow the “junk fee” rule and be enforced.
“I can understand that there may be some technical challenges [businesses] still need to overcome,” Weader said. “But patience on this won’t be eternal, and hopefully the FTC fully implements on the new timeline and doesn’t further extend the delay.”
