18.12.2024 19:35:00
Дата публикации
The US Federal Trade Commission (FTC) has announced the final approval of the Click-to-Cancel rule, which is aimed at simplifying the process of canceling subscriptions and protecting consumers from unfair marketing practices.
The new regulation, published on October 16, 2024, was the result of an extensive public comment period, during which more than 16,000 comments were received.
The essence of the rule is to make the process of canceling a subscription as easy as it was to sign up for it. Any subscription that can be signed up for online must have the ability to cancel online. Companies must also provide convenient cancellation methods for subscriptions signed up offline, for example, by phone.
The FTC requires sellers to provide all important information about the subscription before they receive payment information. The customer must be notified of the cost of the service, the terms of the promotions and their end dates, as well as the cancellation procedure. Companies must obtain explicit consent from users before charging.
The rule covers so-called “negative marketing,” including automatic subscription renewals and free trials. This decision was made in response to a growing number of complaints: in 2024, the FTC received about 70 complaints per day related to subscription cancellation issues.
The new requirements also require companies to maintain proof of customer consent to service for at least three years. Such proof can be provided in the form of a check mark on the website or a signed document.
During the discussion of the proposal, some companies, including representatives of the cable industry, criticized the initiative, arguing that the rule would increase compliance costs. However, the FTC rejected these arguments, pointing out that the claimed costs were unreasonable.
Some provisions of the final document were watered down. For example, the requirements for mandatory annual reminders about subscriptions and pre-requests for consent to discount offers when trying to cancel a subscription were excluded.
However, there are strict penalties for violators, including civil fines and demands for consumer compensation, although critics say the scope of the regulation could spark legal disputes.
The document will come into force on April 14, 2025, 180 days after publication. This will give companies time to adapt their systems to the new requirements.
(The text is translated automatically)
The new regulation, published on October 16, 2024, was the result of an extensive public comment period, during which more than 16,000 comments were received.
The essence of the rule is to make the process of canceling a subscription as easy as it was to sign up for it. Any subscription that can be signed up for online must have the ability to cancel online. Companies must also provide convenient cancellation methods for subscriptions signed up offline, for example, by phone.
The FTC requires sellers to provide all important information about the subscription before they receive payment information. The customer must be notified of the cost of the service, the terms of the promotions and their end dates, as well as the cancellation procedure. Companies must obtain explicit consent from users before charging.
The rule covers so-called “negative marketing,” including automatic subscription renewals and free trials. This decision was made in response to a growing number of complaints: in 2024, the FTC received about 70 complaints per day related to subscription cancellation issues.
The new requirements also require companies to maintain proof of customer consent to service for at least three years. Such proof can be provided in the form of a check mark on the website or a signed document.
During the discussion of the proposal, some companies, including representatives of the cable industry, criticized the initiative, arguing that the rule would increase compliance costs. However, the FTC rejected these arguments, pointing out that the claimed costs were unreasonable.
Some provisions of the final document were watered down. For example, the requirements for mandatory annual reminders about subscriptions and pre-requests for consent to discount offers when trying to cancel a subscription were excluded.
However, there are strict penalties for violators, including civil fines and demands for consumer compensation, although critics say the scope of the regulation could spark legal disputes.
The document will come into force on April 14, 2025, 180 days after publication. This will give companies time to adapt their systems to the new requirements.
(The text is translated automatically)
