US agency adopts rule to make it easier for consumers to cancel unwanted subscriptions

Published On Oct 16, 2024, 1:12 PM

The Federal Trade Commission has implemented a new rule requiring companies to make it easier for consumers to cancel subscriptions. This ‘click-to-cancel’ rule prohibits misleading practices regarding subscriptions and mandates that businesses must clarify ending dates for free trials and obtain customer consent before charging. FTC Chair Lina Khan emphasized that the rule aims to prevent unnecessary obstacles for consumers wanting to cancel services, which often lead to wasted time and money. The rule will take effect 180 days after its official publication.

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Stock Forecasts

DBXView DBX chart on TradingView

Negative

This new regulation might have a negative effect on subscription-based businesses, as they will face increased compliance costs and possible revenue loss from customers dropping services more easily. Companies that rely heavily on subscription income may see pressure on their stock prices as they adjust to these changes.

PAYCView PAYC chart on TradingView

Positive

On the other hand, technology firms developing tools to help consumers manage subscriptions or improve billing practices may benefit. Companies that adapt quickly to enhance user experience may capture market share as consumers prioritize businesses that comply with regulations effectively.

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