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What HappenedThe Federal Trade Commission (FTC) has proposed a new rule that would require companies to make it much easier to cancel subscription services. It would also make it easier to get your money back if you’re tricked into getting or keeping a subscription you don’t want.”Some businesses too often trick consumers into paying for subscriptions they no longer want or didn’t sign up for in the first place,” said FTC Chair Lina M. Khan in a press release. “The proposed rule would require that companies make it as easy to cancel a subscription as it is to sign up for one. The proposal would save consumers time and money, and businesses that continued to use subscription tricks and traps would be subject to stiff penalties.”The new rule is currently in its infancy; the FTC has only finished the first step of the process, which was to vote to publish a notice of proposed rulemaking in the Federal Register. This gives the public time to weigh in before the rule is finalized.So WhatSubscription services — be it a streaming service or a gym membership — can be notoriously hard to cancel. Even when you can sign up for it online, you may need to go through an online chat, call the company, or even show up in person to cancel. This gives them plenty of time to give you the runaround or bombard you with sales pitches.The new rule would make it so you can cancel a subscription the same way you signed up. So, if you can sign up online, the rule would require that you also be able to cancel online — and in the same number of steps.Businesses will still be able to add their sales pitches and alternative offers (i.e., “Why not sign up for this lesser tier rather than cancel?”), but only if you opt into seeing them. If you decline, the business must accept it and skip the pitches.Now WhatIf you have anything you’d like to suggest about the new bill, you can submit your comments as soon as the notice has been published.Once the rule is in place, it will be much easier to cycle services, which is a great way to save money. For example, you can use one streaming service this month, then cancel and use another next month.For now, the best way to stay on top of subscriptions is to regularly audit your personal finances. Look through your bank and credit card statements every month to ensure you recognize every charge, and make sure that any repeating charges are for services you want to keep.Additionally, when you sign up for a free trial, make note of when the trial ends and what day you’ll be billed. (It can be helpful to set reminders in your phone calendar, as well.) Always cancel subscriptions at least two days before the billing date to ensure it processes before you’re charged again.Alert: highest cash back card we’ve seen now has 0% intro APR until 2024If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee. In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes. Read our free reviewWe’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.
Image source: Getty Images
What Happened
The Federal Trade Commission (FTC) has proposed a new rule that would require companies to make it much easier to cancel subscription services. It would also make it easier to get your money back if you’re tricked into getting or keeping a subscription you don’t want.
“Some businesses too often trick consumers into paying for subscriptions they no longer want or didn’t sign up for in the first place,” said FTC Chair Lina M. Khan in a press release. “The proposed rule would require that companies make it as easy to cancel a subscription as it is to sign up for one. The proposal would save consumers time and money, and businesses that continued to use subscription tricks and traps would be subject to stiff penalties.”
The new rule is currently in its infancy; the FTC has only finished the first step of the process, which was to vote to publish a notice of proposed rulemaking in the Federal Register. This gives the public time to weigh in before the rule is finalized.
So What
Subscription services — be it a streaming service or a gym membership — can be notoriously hard to cancel. Even when you can sign up for it online, you may need to go through an online chat, call the company, or even show up in person to cancel. This gives them plenty of time to give you the runaround or bombard you with sales pitches.
The new rule would make it so you can cancel a subscription the same way you signed up. So, if you can sign up online, the rule would require that you also be able to cancel online — and in the same number of steps.
Businesses will still be able to add their sales pitches and alternative offers (i.e., “Why not sign up for this lesser tier rather than cancel?”), but only if you opt into seeing them. If you decline, the business must accept it and skip the pitches.
Now What
If you have anything you’d like to suggest about the new bill, you can submit your comments as soon as the notice has been published.
Once the rule is in place, it will be much easier to cycle services, which is a great way to save money. For example, you can use one streaming service this month, then cancel and use another next month.
For now, the best way to stay on top of subscriptions is to regularly audit your personal finances. Look through your bank and credit card statements every month to ensure you recognize every charge, and make sure that any repeating charges are for services you want to keep.
Additionally, when you sign up for a free trial, make note of when the trial ends and what day you’ll be billed. (It can be helpful to set reminders in your phone calendar, as well.) Always cancel subscriptions at least two days before the billing date to ensure it processes before you’re charged again.
Alert: highest cash back card we’ve seen now has 0% intro APR until 2024
If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee.
In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.
