US 'click to cancel' rule to tackle subscription traps

Published On Oct 16, 2024, 10:17 PM

The US Federal Trade Commission (FTC) has implemented a new 'click to cancel' rule aimed at simplifying the process for consumers to cancel subscriptions. This regulation mandates that companies make the cancellation process as easy as the sign-up process, requiring customer consent before renewing subscriptions. The rule will prevent businesses from using complex methods such as chatbots to cancel subscriptions and will allow for easier cancellation of memberships obtained in-person.

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Stock Forecasts

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Negative

The new FTC ruling could lead to reduced customer retention for subscription-based businesses that previously relied on complex cancellation processes. This may prompt a downturn in revenue for companies like Amazon, who have been scrutinized for their subscription practices. As a result, we may see a negative short-term impact on stocks in the subscription sector.

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