Avoid the ‘Doom Loop’: New rule makes it easier to cancel subscriptions
The Federal Trade Commission approved a new rule this week that should make it easier for you to cancel a subscription you no longer want.
The "Click to Cancel" rule tells businesses what they must do and can no longer do to their subscribers.
"I think almost everybody I've talked to has a story about trying to cancel a product and how difficult it was," said Erin Witte, director of consumer protection at the Consumer Federation of America . "And this is not by accident; this is by design."
"The new rule is designed to deal with all the complaints the Federal Trade Commission gets, thousands of complaints about problems canceling subscriptions," Contributing editor of checkbook.org Herb Weisbaum told Seattle's Morning News. "Too often businesses make people jump through endless hoops to cancel customer service lines that aren't answered yet. It stuck on a 'doom loop' that you can ever talk to somebody. There's a big button to subscribe, but it takes click after click to find the small print to cancel."
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Weisbaum said the new rule would allow you to cancel online if you signed up online or if you sent in a letter, you can cancel by letter.
"The new click to cancel rule requires businesses to make their cancelation processes at least as easy to use as their sign up methods," Weisbaum said.
When it takes full effect next year, the new rule should help eliminate the frequent hassles involved with ending unwanted subscriptions for everything from streaming services and gym memberships to automatic shipments of cosmetics and nutritional supplements.
"This is going to save people a lot of time, a lot of money, and it's going to ensure that they get the products and the subscriptions that they really want, not just what they felt like they forgot about, or they relented because they couldn't figure out the cancellation process," Witte told Checkbook.
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In its news release on the new rule , the FTC warned businesses that their cancellation processes should not be overly burdensome. And it provided three guardrails for them to follow:
You can't require people to talk to a live or virtual representative to cancel if they didn't have to do that to sign up.
If you offer cancellation by phone, you can't charge extra for that service, and you must answer the phone or take a message during normal business hours. If you accept messages, you must respond promptly.
If people originally signed up for your program in person, you can offer them the opportunity to cancel in person if they want to, but you can't require it. Instead, you need to offer a way for people to cancel online or on the phone.
"The teeny, tiny print this is now going to be clearly, it's already been illegal to do this, but they're basically making it even more obvious to companies what they have to do," Weisbaum said. "They have to disclose all this information up front, and they have to have positive opt in. You have to say, I am willing to be part of a subscription program. Or if they don't do that, that's illegal."
Charlier Harger, KIRO Newsradio News Director and fill-in host for Seattle's Morning News said he had a tip. "One of my life hacks was always to change my address to being in California whenever I was finding a hard issue of canceling a subscription. In California, they have this rule already, and so you know, if you're running into this issue, just change your address to like a mailbox in California, and you're able to find it a lot easier. I was able to cancel a lot of subscriptions that way."
