'Companies are not going to like this,' FTC wants to make cancelling subscriptions easier
BOSTON — The Federal Trade Commission is proposing a new provision to help you keep track of your subscriptions.
Whether it's buying new clothes, trying a new gym, or even trying to change up your diet, chances are there's a subscription for it.
But what happens when you're ready to cancel, but the company isn't making it easy for you?
Well, the FTC is trying to change that, proposing a new provision called "click to cancel."
The proposal would make the cancellation process just as easy as the subscription process. For example, if you signed up for a subscription online, you should also be able to cancel it online.
Under the provision, companies would also be required to provide subscribers with an annual reminder before their subscriptions are automatically renewed and customers are charged.
In addition, any additional modifications or upselling to subscriptions would have to be agreed upon by consumers during the cancellation process before companies can begin pitching any other subscriptions.
According to Consumer World's Edgar Dworsky, the FTC currently has no outlined consequences in place for companies that make it difficult for customers to cancel subscriptions.
"Right now, the FTC has to file individual lawsuits against companies, because they've come out with guidance — if you will — about how these Negative Option Plans are supposed to work," said Dworsky. "If they had a concrete rule, just kind of black and white law of what everybody has to do, they're hoping that will make more companies compliant."
WATCH: Edgar Dworsky's full interview
According to the FTC, Negative Option Marketing, "refers to a category of commercial transactions in which sellers interpret a customer's failure to take an affirmative action, either to reject an offer or cancel an agreement, as assent to be charged for goods or services."
The changes the agency is proposing would impact the Negative Option Rule, which was put into place in 1973.
Dworsky said the proposed changes would also require companies to be more clear and upfront about terms, in their advertising. That would mean no more hiding details in the fine print.
"What you can expect is opposition from companies," he said. "Companies are not going to like this. They have perfected how to get you into their system and get monthly payments from you. They haven't quite perfected, or maybe they have, how to keep you as a customer. So, what's really going to happen is these companies are going to come out of the woodwork - complain, complain, complain, to the FTC to try to water down the rules."
When asked about how consumers can get involved in the process, the FTC said they had already held one public comment period, but putting these changes into place is a lengthy process.
They do expect that there will be another opportunity for consumers to voice their opinions before any of these changes are finalized.
According to Dworsky, it's good to get in the habit of taking a deep dive into your credit card statement at least once a year to actually see what charges are recurring every month and if you still need them.
