Imagine a world where it's as easy to cancel a subscription as it is to sign up for one.
The Federal Trade Commission is trying to make that a reality with a new set of proposed rules for companies, which FTC chair Lina Khan shared with NBC News senior consumer investigative correspondent Vicky Nguyen in an exclusive on TODAY.
"This rule would basically make it so that companies have to make it as easy to cancel a subscription as they do to sign up," Khan said on TODAY on March 23.
With subscriptions becoming part of the normal routine to access various services — from gym memberships to streaming services and music platforms — so has the challenging process to get untangled from them when you want to quit.
Some companies require you to show up in person to cancel, subject you to drawn-out sales pitches to stay, offer confusing online directions or leave you on hold for a long time when you call.
The FTC is now taking aim at these "dark pattern" tactics designed to trap consumers with its proposed "click to cancel” provision. The proposed change is in reaction to the thousands of consumer complaints the FTC receives each year from consumers angry about having to jump through hoops to end a subscription.
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A change to the FTC's negative option rule would require businesses to allow customers to cancel subscriptions the same way they signed up for them, whether online or over the phone, in the same number of steps.
It also would force businesses to ask consumers whether they want to hear any sales pitches aimed at keeping them subscribed. If a consumer responds "no," the business must then go forward with the cancellation process.
Companies would also have to provide an annual reminder to customers about their subscriptions before they're renewed.
The FTC will begin taking public comment on the proposed rule on its website, and Khan said it could take up to six months or longer for the rule to go into effect if it's enacted.
The changes would also compel companies to disclose certain terms before collecting your billing information or face hefty fines or be forced to give refunds to customers.
"So they need to tell you how long the trial period goes for," Khan said. "Clearly have to tell you by when you have to cancel. Clearly have to tell you what the billing cycle looks like."
Khan expects some pushback from subscription-based services over the proposed rule.
"We welcome their comments and welcome seeing what their perspective is," she said. "But at the end of the day, consumers don’t benefit if companies are tricking or trapping them."
The agency has tried other means to stop the tactic, but has not seen much change in companies' behavior.
"The FTC has been bringing lawsuits against some of these practices for some time," Khan said. "We put out guidance to put companies on notice, and we’ve just realized it’s not having a sweeping enough effect."
While the FTC proposal is still in the early stages, experts suggest the following tips to help keep up with your subscriptions and avoid unwanted fees.
- Apps like Rocket Money or Mint can help you track your various subscriptions.
- Read the fine print before signing up for any service.
- If you do a free trial of a service, set a calendar reminder of when to cancel.
- Check to see if you are on auto-renewal.
- The site Privacy.com allows you to make a unique debit card number for every online purchase, including subscriptions, that allows you to decide who can charge your card, how often and for how much.