The White House has announced new rules aimed at making it easier for consumers to cancel subscriptions and services. The move is part of a broader effort by the Biden administration to protect consumers against corporations that make it difficult to cancel subscriptions or services. The Federal Trade Commission (FTC) is expected to finalize a proposal known as “click to cancel” as early as Monday, requiring companies to make it just as easy to cancel a subscription or service as it was to sign up.
Neera Tanden, President Joe Biden’s domestic policy advisor, said in a briefing on Friday that companies often make the cancellation process time-consuming and frustrating to hold onto customers’ money for longer.
“These hassles don’t just happen by accident,” Tanden told reporters. “Companies often deliberately design their business processes to be burdensome or hard to navigate in order to deter consumers from claiming a rebate or canceling a service they no longer want.”
The new regulations, which were rolled out on Monday (August 12), will be implemented on varying timelines, with some taking weeks and others taking months. The rules could apply to a range of services, including gym memberships and subscriptions with phone and internet companies. The administration will also call on health insurance companies to allow claims to be submitted online rather than requiring insured customers to print out and mail forms in for coverage.
The focus on canceling services comes as several government agencies take aim at some of the most common consumer complaints. This includes new rules from the Department of Transportation that took effect in June, requiring airlines to provide automatic refunds when flights are canceled or significantly delayed. The agency is now proposing a crackdown on junk fees, such as parents having to pay more to sit next to their children when flying.
The Biden administration’s ongoing crackdown on what it calls “junk fees” has faced some roadblocks, including industry opposition and court challenges. However, the administration remains committed to lowering costs for consumers and improving voter confidence in the economy.
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