The Federal Trade Commission (FTC) has plans to impose hefty penalties on several companies for deceptive practices related to their "click-to-cancel" rule, mainly focusing on subscription services. The FTC aims to protect consumers by protecting their interests in this proposition that would help them cancel a subscription in the simplest way possible.
The agency wants consumers to find it easy to cancel a subscription, as easy as applying for the service when they first entered, and avoid deceptive tactics that would divert them from unsubscribing.
FTC's 'Click-to-Cancel' Rule to Impose Fines Against Companies
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The latest rule provision of the FTC centers on the "Click to Cancel," one that looks into the favor of consumers and the public for their subscriptions to the many services available. This is a big step in expanding consumer protection in the tech industry now, especially as the FTC regarded that canceling a subscription should be as easy as availing of the service.
According to the joint statement of FTC Chair Lina Khan, Commissioner Rebecca Kelly Slaughter, and Commissioner Alvaro M. Bedoya, should this rule be passed, it would impose a fine on companies that still center on deceptive tactics.
Additionally, the Commission would also try to return the charged payments on the subscriptions, if when a consumer found it hard to unsubscribe from it or asked to do it by phone and other extra steps they need to extend so that they may cancel it.
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Deceptive Tactics for Canceling Subscriptions is a Big No
The FTC is cracking down on companies with "deceptive business tactics" that trick or trap consumers into paying for unwanted subscriptions from different services, says Khan.
This ruling is not yet approved and there are still many processes it would undergo, but these statements and actions by the FTC aim to help consumers that are already suffering from subscriptions they wish to depart from but cannot due to the service provider.
FTC's Actions for Subscription Services
The FTC's action is part of a broader crackdown on deceptive subscription practices, which have become increasingly prevalent in recent years. The agency has received thousands of complaints about subscription services, which often rely on hidden fees and deceptive cancelation practices to generate revenue.
It previously looked into the actions of Amazon Prime and the infamous difficult cancelation of its subscriptions to the company, as well as misleading the public about its service.
Amazon is one of the most notorious companies behind this, with many consumer groups and advocates already flagging down the company for their deceptive behavior. Still, this has been a problem with the Prime membership where many have suffered or seen charges on their Prime subscriptions despite not using it.
The FTC is not taking this lightly anymore and has managed to draft its proposal that it aims to pass as a rule to further protect the public and give them the power to cancel whenever they want. The Commission regarded that if it is not as easy to cancel as they have subscribed, it is important to report these as certain fines are in place for these deceptive tactics.
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