Government cracking down on companies that make it hard to cancel subscriptions

The Federal Trade Commission is seeking to crack down on companies that make canceling subscriptions difficult after a slew of complaints.

The Wall Street Journal reported that the company is attempting to establish a straightforward, click-to-cancel option for subscriptions rather than the convoluted, and as the FTC argued, aggressive, methods that some businesses employ to try to persuade customers to continue making subscription purchases.

BIG TECH IS ORDERED BY FTC TO ADDRESS Wave IN AD PROMOTING SCAMS AND False PRODUCTS.

According to FTC Chairwoman Lina Khan, businesses shouldn’t be able to coerce customers into paying for memberships they do not need. ” This is the subject of countless complaints.”

The plan is a component of the Negative Option Rule, which was first implemented in 1973 and monitors the practice of charging clients for goods or services when they forget to cancel an understanding. According to the organization, it received 17, 427 claims in 2022 and 16, 020 complaints under the policy.

As a way to increase sales, businesses have increasingly turned to membership. Between 2012 and 2018, revenue from membership increased by 300 %. Another spike in subscription recognition was brought on by the COVID-19 pandemic, which businesses have continued to experience even as many consumer patterns have returned to pre-pandemic levels.

According to studies conducted by the consulting company West Monroe, nearly all Americans lose track of their subscriptions because they are so numerous and difficult to track and explore. 100 % of respondents to the survey acknowledged that they were unaware of the total amount of each subscription. The general was 3.4 times lower than what they actually paid when asked to imagine.

70 % of respondents to a 2016 Hiatus survey continued to pay for excess membership because they neglected to cancel prior to the automatic renewal date. This particular subject is what the FTC is looking to address.

Many well-known businesses either use call-to-canceled or similar Nightmarish processes, which make canceling subscriptions incredibly difficult.

A business may fill out a form that will result in the service representative calling them to confirm in order to withdraw their Comcast subscription. In some instances, the consultant will speak for several minutes while making discounts in an effort to keep them from leaving. In a 2014 case that was reported by Gizmodo, an irate customer was forced to deal with an agent who spoke for almost 20 minutes and asked provocative questions like,” So you’re not interested in the fastest computer in this place?”

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Press media are yet another serious offender. Only 41 % of news organizations offer a” press to disconnect” mode, with the majority forcing customers to go through difficult cancellation procedures, according to an American Press Institute study from 2021. 60 % of news organizations surveyed used” customer service reps” who are trained in strategies for” saving” renewals when customers ask to cancel, similar to Comcast.

Despite the growing backlash, subscription-based businesses have just stepped up their efforts to get cancellation more challenging. According to a FTC state from September,” advanced dark patterns ,” such as call-to-canceled models, are spreading across the globe.