Latest news with #NegativeOptionRule
Business Insider
16-05-2025
- Business
- Business Insider
You'll stay stuck in unwanted subscriptions for 2 more months after the FTC delayed its new click-to-cancel rule
It was about to get easier to get rid of that pesky subscription you've been stuck paying for until the Federal Trade Commission delayed enforcement of its new click-to-cancel rule. Former FTC chair Lina Khan, in a Thursday post on X, said that the enforcement delay will give firms more time "to keep trapping people in subscriptions." Most consumers are familiar with the unwanted subscription rigamarole: It's painlessly simple to sign up online for a streaming service, gym, or other subscription, but when the time comes to stop monthly payments and unsubscribe, there's no way to do it digitally, and you're forced into the dreaded routine of navigating call center chatbots that only seem to operate during the middle of your workday. The FTC's click-to-cancel rule was supposed to go into effect in its entirety this week, ending the nightmarish cycle and making it just as easy for consumers to cancel their subscriptions as it was to start them. But on Friday, the commission's leaders voted to extend its enforcement deadline by two more months. "Having conducted a fresh assessment of the burdens that forcing compliance by this date would impose, the Commission has determined that the original deferral period insufficiently accounted for the complexity of compliance," read a statement from Chairman Andrew Ferguson, co-signed by commissioners Melissa Holyoak and Mark Meador, about the decision. After the FTC approved the click-to-cancel rule, also known as the Negative Option Rule, in November 2024, businesses had more than six months to comply before enforcement was scheduled to begin. The rule's requirement to remove statements that misrepresent the nature of a subscription took effect on January 14. Its enforcement provisions — requiring clear disclosures, user consent, and easy cancellation policies — were set to take effect on May 14. However, the FTC's latest decision pushes the enforcement deadline back by 60 days, to July 14. "We object to the delay," former FTC commissioners Alvaro Bedoya and Rebecca Slaughter said in a joint statement posted to social media on Tuesday. "And were we allowed to exercise our duties as commissioners, we would have voted 'no.'" Bedoya and Slaughter were the only two Democrats serving as FTC commissioners until March 18, when President Donald Trump fired them. The pair, whose terminations indicated their service at the FTC was "inconsistent" with Trump's policy priorities, have filed suit against the administration, alleging their firings violate a 1935 Supreme Court precedent that the president cannot fire FTC commissioners without cause, CNN reported. Even if Bedoya and Slaughter had remained at the FTC, the conservative majority at the commission would be able to pass rules via a 3-2 vote. The decision to delay the click-to-cancel enforcement received a 3-0 vote, with all three Republican commissioners voting in favor of the deadline extension. "The companies create these traps," Bedoya and Slaughter's statement continued. "They're the ones who made it so hard to get out. They didn't have to wait to make it easier to unsubscribe. But they did — they waited until the FTC told them to stop. Then, they still got six months to get their houses in order. Why do they get another two months to comply?"
CNET
15-05-2025
- Business
- CNET
The FTC's 'Click to Cancel' Rule Delay Could Make It Harder to Ditch Unwanted Subscriptions
The Federal Trade Commission extended the deadline for its "click to cancel" rule a second time to give servicers more time to come into compliance. If you've ever had trouble trying to cancel a subscription, the FTC's Negative Option Rule is intended to make it just as easy to cancel a subscription as it is to sign up for one. The rule went into effect in January, but the FTC pushed back enforcement on some provisions until May 14. Now the FTC is giving businesses until July 14, saying in a statement that the extension was necessary because the "original deferral period insufficiently accounted for the complexity of compliance." Here's how this delay could impact you and how to cancel subscriptions you no longer use in the meantime. What the 'click to cancel' rule means for you With the new rule, sellers must be more transparent and can't misrepresent material or mislead customers when marketing a service. Previously, servicers could make it tricky to end a subscription by hiding the cancel button, including misleading language and forcing you to click through additional offers instead of making it a straightforward process to cancel. Now, the rule requires businesses to conspicuously and clearly disclose terms and get your informed consent before charging for a subscription or membership. There must also be a simple mechanism to cancel the negative option feature and immediately halt charges. Retailers that violate the rule will penalized with civil penalties and redress, according to the FTC. However, the FTC closed its statement with the caveat, "Of course, if that enforcement experience exposes problems with the rule, the Commission is open to amending the rule to address any such problems." How to cancel subscriptions while this rule is delayed Some companies have already put the click to cancel rule in effect. However, if you don't have to wait to see if this rule is implemented for one of your servicers to get rid of unwanted subscriptions. CNET Money editor, Kelly Ernst, used budgeting app Rocket Money to help her get rid of monthly services she know longer wanted, saving her $400 in 15 minutes. You don't have to use a budgeting app to eliminate pesky subscription bills. Check your bank account and credit card statements from the past month and look for any recurring charges from services you no longer use. Then log into your service account and cancel or pause the service. If you're struggling to find an option to cancel, call the service's customer service phone number to end your account.
Yahoo
12-05-2025
- Business
- Yahoo
FTC delays enforcing 'click to cancel' rule that would finally bring the hammer down on companies that make it as annoying as possible to cancel subscriptions
When you buy through links on our articles, Future and its syndication partners may earn a commission. If you've ever found yourself stuck on the phone trying to cancel an unwanted subscription or end a "free trial," you're in luck because the FTC has a new rule to fix that. The only problem? They're delaying actually enforcing it. The "Rule Concerning Subscriptions and Other Negative Option Plans", or more simply the "Negative Option Rule", is a regulation passed under the Biden administration late last year that's designed to crack down on companies using predatory tactics to try to prevent people from canceling their subscriptions. That includes any practice that makes it significantly harder to cancel a subscription than it was to sign up. The Negative Option Rule was set to go into effect on May 14, but on May 9, the FTC voted 3-0 to delay enforcing compliance until July 14, 2025. The FTC statement on the delay claims this was to "ensure ample time for companies to conform their conduct to the Rule," meaning adjust their policies to make cancelling subscriptions easier like the Negative Option Rule requires. The reluctance to begin enforcing the law might also be due to ongoing lawsuits from the U.S. Chamber of Commerce, the Interactive Advertising Bureau, the Electronic Security Association, and the Internet and Television Association (NCTA), who are trying to block the Negative Option Rule. It probably shouldn't come as a surprise that cable companies and advertisers aren't fans of a law that would force them to make it easier for consumers to save money. Ironically, their pushback against the Negative Option Rule highlights why it's necessary. Business practices that make it unnecessarily difficult to cancel recurring charges can be the virtual equivalent of highway robbery, especially when companies are vague or deceptive about what you're signing up for—for instance, automatically charging customers for a full year's subscription without warning because they didn't cancel a "free trial." Best of the Best 2025 games: Upcoming releasesBest PC games: All-time favoritesFree PC games: Freebie festBest FPS games: Finest gunplayBest RPGs: Grand adventuresBest co-op games: Better together That's not to say that free trials and subscriptions are always predatory. However, anyone who's found themself stuck on the phone or in an endless loop of customer service emails trying to get back money from a charge they didn't mean to pay knows how costly even one encounter with a shady subscription can be. That's what the Negative Option Rule is supposed to prevent. As the FTC summary states, the rule was "calculated to combat unfair or deceptive business practices, including recurring charges for products or services consumers do not want and cannot cancel without undue difficulty." Businesses can still offer free trials and as many subscription options as they want. They just can't make you jump through hoops and run a lap around Mordor to cancel. Being clear about what consumers are signing up for and respecting their freedom to cancel their subscriptions shouldn't be controversial. The FTC initially gave businesses 180 days already to prepare to comply with the Negative Option Rule. An additional 2 months is generous, but hopefully the FTC doesn't continue deferring enforcement. This law might not be popular with business titans, but it's the kind of protection consumers have needed for a long time.
Digital Trends
11-05-2025
- Business
- Digital Trends
It might be a while longer before you can easily cancel subscriptions
The Federal Trade Commission had voted in a rule that would make it easier to cancel subscription services, but the start of that rule has been pushed back until July 14. Initially, the regulation — called the Negative Option Rule — went into effect on January 19, but certain provisions weren't set to kick in until May 14. These provisions would require companies to make it as easy to cancel a subscription as it is to sign up. Numerous telecom companies spoke out against the ruling. The National Cable and Telecommunications Association filed a lawsuit to appeal the decision, claiming that the FTC had overstepped the limits of its authority. The decision to delay these provisions by 60 days is due to the 'complexities' of changing the processes, and the FTC says it has 'acknowledged that compliance entailed some level of difficulty' and 'determined that the original deferral period insufficiently accounted for the complexity of compliance.' According to the FTC's statement, companies have until July 14 to get their processes in order. At that point, 'regulated entities must be in compliance with the whole of the Rule because the Commission will begin enforcing it.' That sounds like a win for consumers, but the FTC makes another caveat: 'Of course, if that enforcement experience exposes problems with the Rule, the Commission is open to amending the Rule to address any such problems.' Recommended Videos Certain subscription services are notorious for the hoops customers have to jump through in order to cancel. The option to cancel is often hidden deep within menus, and in some cases, the only way to cancel is by contacting customer service. This process can take over an hour, assuming you don't get disconnected during that time. And let's not even get started on cancelling something like a gym membership; some people have reported closing bank accounts just to get the gym off their backs. The FTC's ruling is intended to make the process more consumer-friendly, and it can't go into effect soon enough.
Miami Herald
10-05-2025
- Business
- Miami Herald
FTC delays enforcement of ‘click-to-cancel' for subscriptions by 60 days
May 10 (UPI) -- The Federal Trade Commission has delayed enforcing the Negative Option Rule, which is the "click-to-cancel" option requiring companies to make it as easy to cancel subscriptions and other programs. On Friday, commission members by a 3-0 vote deferred required compliance by 60 days to July 14. "Of course, if that enforcement experience exposes problems with the Rule, the Commission is open to amending the Rule to address any such problems," the commission said in a statement. The rule that went into effect on Jan. 19 that includes physical and digital subscriptions as well marketing, including prenotification plans, continuity plans, automatic renewals and free trial conversion offers. Consumers often found it was difficult to cancel them without a few clicks on a website. The FTC introduced the Negative Option Rule in 1973 to regulate continuity plans, automatic renewals and free trial offers, regardless of whether they appeared online, on the phone or in person. The amendments to the Negative Option Rule strengthen the rule. The amendments "require companies that sign consumers up for recurring charges to clearly and conspicuously disclose all material terms of the transaction and to obtain express informed consent to a negative-option feature. And they prohibit companies from making it any more difficult for consumers to cancel than it was to sign up." Companies also must provide relevant information about cancellation before they collect customers' money. Because of concerns "it would take a substantial amount of time to come into compliance," the agency originally deferred it until May 14, the commission said. After "a fresh assessment of the burdens that forcing compliance by this date would impose," it was delayed another 60 days. The amended rule was first proposed in 2023. The Eighth Circuit is considering a challenge to the rule by industry groups. The court declined to stay the implementation dates in January. That circuit includes seven Plains states. Copyright 2025 UPI News Corporation. All Rights Reserved.
