The US Federal Trade Commission (FTC) has issued a new policy for American users who frequently subscribe to memberships, free trials, and subscriptions in the field of e-commerce, gaming, and more.

According to the ruling body for consumer protection, the regulation will allow consumers to cancel the ongoing charges for the services and goods that they unknowingly signed up for, according to NPR.

FTC Will Make Canceling of Subscriptions Easier

Americans Can Easily Cancel Subscriptions, Free Trials Soon, FTC Says
(Photo : Ian Hutchinson from Unsplash)
FTC wants companies to stop manipulating customers by delaying or not cancelling physical or online subscription.

Sometimes, we do not know that a mobile app sitting in the background of our smartphone is silently charging us even with a small fee.

For consumers who want to save some money from these pesky subscriptions, this deduction is already big, especially if they are unaware that they subscribed to this service.

A new proposed rule from FTC on Thursday, March 23, reveals that Americans will make it easier to drop both digital and physical subscriptions that are milking their wallet.

As such, the regulation will also cover digital subscriptions in the field of e-commerce, traditional print media, cable TV service, and even gym memberships, according to a report by CNN.

The policy will most likely affect the service providers in the digital age. Some small businesses will also feel the impact of the implementation across the US.

Related Article: US FTC Issues Orders to 8 Social Media, Video Streaming Firms on How They Screen For Misleading Ads

FTC Wants Companies to Avoid Deceiving Customers

During a recent conference call, Lina Khan, the acting FTC Chair says that companies that provide subscription or membership services should not plague customers with unwanted retention offers.

"The idea here is pretty simple. Companies should not be able to manipulate consumers into paying for subscriptions that they don't want," Khan said about the cancellation of the subscription.

Some firms reportedly deploy unfair strategies to keep a huge number of users in their favor. As such, others delay the cancellation of a subscription before a person cancels it or they require a user to pay before they quit the subscription.

Khan highlights that while the FTC is aware that various solutions can address the issue, there's no particular rule that might apply to the whole economy.

Of course, the proposed regulation will mean that the users will have more choices before canceling their subscription online or in person. Companies engaging in subscription-based products should first ask the users about the matter. They could ask them if they agree to the retention offers.

With that being said, companies will be required to provide very detailed information about the terms before the billing process takes place.

The law enforcement agency calls the regulation a "click to cancel" rule.

In other news, Forbes reports that US Senator Elizabeth Warren urges FTC to review the acquisitions made by primary care firms.

The Massachusetts Democrat Wednesday also asked the agency to "carefully scrutinize" the scenario, particularly the acquisition of Oak Street Health worth $10.6 billion.

Read Also: FTC Warns Companies Regarding AI Capabilities Claims

Joseph Henry

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