October 16, 2024
Click to cancel is here.
Have you ever tried to cancel an online subscription or gym membership and it’s like impossible? Well as of today – the federal trade commission issued a new rule that says — that’s gotta stop.
I talked all about this new rule –which actually has four pieces — with the chairman of the Federal Trade Commission Lina Khan. This rule has been in the works for more than a year and modernizes a regulation from 1973 called the Negative Option Rule. Based on that, the click to cancel rule will….
One – it prohibits sellers from misrepresenting any fact while marketing their good or service…so if they advertise that the subscription or membership is 10-bucks a month – it has to be 10 bucks a month – not 10 bucks a month plus a bunch of hidden fees.
Two – it prohibits sellers from hiding the fine print on the membership or subscription. It has to be crystal clear – when you will be charged, how often you will be charged, how long your free trial will last. Things like that.
Three – it prohibits sellers from assuming you are opting in to a recurring payment. This rule forces those sellers to confirm with you that you want that.
And four – it says if it takes you one click to sign up – the seller has to make canceling also one click. Or if you sign up for a gym membership and that takes just one easy form to get you in…it has to be the same one easy form to get you out.
But after we’ve seen rule after rule get shot down by the courts – I asked the chairman whether this one was going to hold up.
We also talked about why all kinds of Biden administration rules have been shot down by the courts. Is it because the administration is overstepping its authority or is it because plaintiffs are playing the courts. And we talked all about what is happening with that noncompete ban.
Watch the full interview with the FTC Chairman here.
Read more about the Click to Cancel rule here.
