The proposed “click to cancel” rule would make it so customers who sign up for a service online can also cancel online with relative ease, rather than having to make a call.
It would also require companies to send a reminder before automatically renewing a subscription.
FTC Chairwoman Lina Khan said some businesses “too often trick consumers into paying for subscriptions they no longer want or didn’t sign up for in the first place.”
“The proposed rule would require that companies make it as easy to cancel a subscription as it is to sign up for one,” Khan added.
The FTC could fine companies $50,000 per violation.
“Too often, companies make it difficult to unsubscribe from a service, wasting Americans’ time and money on things they may not want or need,” Biden tweeted on Thursday. “It shouldn’t be harder to cancel a service than it was to subscribe for it.”
It’s the latest sweeping pro-consumer rule proposed by Khan, who has also sought to crack down on non-compete agreements and ticketing fees.
Unlike other FTC proposals, though, the “click to cancel” rule hasn’t been met with a chorus of opposition from industry lobbying groups. The Electronic Transactions Association, which represents the payments industry, came out in favor of the effort.
“The proposed rule would also provide clarity across industries about sellers’ obligations when engaging in negative option marketing,” the commissioners said.
Read more on the FTC announcement at TheHill.com.