FTC decision: Simply cancel the subscription with a click
Consumers must be able to cancel subscriptions with just a few clicks, the FTC has finally decided –, thus putting an end to practices such as those of Adobe.
(Image: Thapana_Studio/Shutterstock)
Providers of digital subscriptions must make it possible to cancel subscriptions with one or a few simple clicks, as the Federal Trade Commission (FTC) has finally decided. And although the decision by the competition and consumer protection authority naturally only applies to the USA, it is likely to have a global impact.
Practices in which providers make it as difficult as possible for their customers to terminate contracts are explicitly no longer permitted. In its decision, the FTC states that it must be just as easy to cancel a subscription as it was to set it up. "No one should be forced to pay for services they no longer want," emphasizes FTC Chairwoman Lina M. Khan.
Informed consumers
In summary, providers must always provide all important information correctly and easily accessible when taking out a subscription. Customers must always know what they are signing up to – and providers must be able to prove that their customers are aware of the terms of the subscription before they sign up. This must be explicitly stated before payment details are entered.
Crucially, anyone who takes out a subscription online must be able to cancel it with just a few clicks. And anyone who signs a contract in person must be able to cancel it online or over the phone.
Providers must now implement the requirements within 180 days. The FTC collects information on infringements and helps consumers to get their money back from providers. In addition, non-compliance with the new regulation could result in further penalties from the authority. Although the FTC emphasizes in its announcement that the decision does not only apply to digital subscriptions, it highlights that the number of complaints has risen sharply in recent years –, meaning that they go hand in hand with the enforcement of the SaaS model.
Negative example Adobe
Although many providers enjoy a poor reputation with such subscriptions, there has recently been an increase in complaints against Adobe, for example: information on minimum contract terms was not clear to many customers when they signed up, and according to complaints, the provider also made it deliberately difficult to cancel the subscription. In Germany, a similar decision was only made at the end of September regarding the Deutschlandticket, which must be able to be canceled directly and without registration in future.
Email marketing shows that such a fundamental regulation can work without exploiting further loopholes: anyone who wants to unsubscribe from newsletters can now usually do so with just one or a few clicks.
(fo)
