FTC Mandates Easier Cancellation for Trials,  Auto-Renewing Subscriptions and Memberships

Lee Duynslager<duynslag@msu.edu> -

FTC Mandates Easier Cancellation for Trials,  Auto-Renewing Subscriptions and Memberships

The Federal Trade Commission (FTC) has recently adopted the “Click to Cancel Rule,” aimed at simplifying the process for consumers to cancel auto-renewing subscriptions and memberships. This new rule mandates businesses to:

  1. Prohibit misleading practices.
  2. Obtain consumer consent before charging for memberships, free trials, and automatic renewals.
  3. Notify consumers when free trials or promotions are ending.
  4. Ensure that canceling a membership or subscription is as easy as signing up for it.

This rule which will become effective 60 days after publication in the combined federal register, is expected to positively impact consumers by requiring notifications for auto-renewals of Software as a Service (SaaS) subscriptions and other IT-related services purchased under the MSU EIT program.

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