Are you one of those consumers who have been tricked into paying for a subscription you didn't want just because you forgot to cancel it? If yes, then the new policy by the Federal Trade Commission (FTC) should save you some money.
The FTC has recently proposed a new policy that allows consumers to cancel their subscriptions easily, including but not limited to, digital streaming, phone companies, and gym memberships, amongst others.
The new policy requires companies to offer a "simple cancellation process" similar to the one followed by consumers while signing up. This will ensure that online sign-ups no longer require in-person cancellations, thus increasing accessibility to availing cancellation services.
Furthermore, users can now decide whether they wish to view different schemes or offers while cancelling a subscription. This will prevent them from being bombarded by additional offers or signing up for deals caused by confusion.
In this article, we will discuss the implications of the new policy on subscription cancellations,
its benefits for consumers, and how it is expected to reduce the number of subscription traps and tricks companies use to increase their profits.
Why is there a need for a new policy?
The FTC proposed the new policy to help consumers who find it challenging to cancel their subscriptions. Many companies make it hard for consumers to cancel their subscriptions, and sometimes the process can be confusing, leading consumers to continue paying for subscriptions they no longer want.
In some cases, companies automatically renew subscriptions without the consumer's knowledge, leading to unexpected charges on their credit card. The FTC aims to put an end to such unfair practices by requiring companies to offer a simple cancellation process.
What does the new policy look like?
The new policy requires companies to offer a simple cancellation process similar to the one followed by consumers while signing up. This means that online sign-ups will no longer require in-person cancellations, thus increasing accessibility to availing cancellation services. The cancellation process should be clear, easy to find, and require minimal steps to complete. Additionally, users should have the option to decide whether they wish to view different schemes or offers while cancelling a subscription.
Why should you know about it?
The new policy will benefit consumers in several ways. Firstly, it will make it easier for them to cancel subscriptions they no longer want. This means that they will no longer be stuck paying for subscriptions they forgot to cancel or find it challenging to do so. Secondly, the new policy will help consumers save money as they will no longer be charged for subscriptions they no longer want. Thirdly, it will help consumers save time by not having to go through a complex and time-consuming cancellation process.
What are the implications of the new policy for companies?
The new policy will have significant implications for companies that offer subscriptions to their customers. Firstly, they will have to comply with the new policy and offer a simple cancellation process. Secondly, they will have to ensure that the cancellation process is easy to find, clear, and requires minimal steps to complete. Failure to comply with the new policy may result in hefty fines and penalties.
How is the new policy expected to reduce subscription traps and tricks?
The new policy is expected to reduce subscription traps and tricks by imposing stringent penalties on companies that violate it. Many companies use subscription traps and tricks to increase their profits. For example, they may offer free trials that automatically convert to paid subscriptions if the consumer forgets to cancel them. They may also make the cancellation process difficult to find or require consumers to call customer service to cancel their subscriptions. The new policy will put an end to such unfair practices by requiring companies to offer a simple cancellation process and imposing penalties for non-compliance.
In conclusion, the new policy by FTC is a step in the right direction towards empowering consumers and holding companies accountable for fair business practices.