US cracks down on ‘endless hoops’ to cancel subscriptions

The new rule, introduced by the Federal Trade Commission (FTC) and set to come into force in six months’ time, follows a series of high-profile lawsuits the regulator has brought against Amazon and Adobe for allegedly misleading customers.

FTC chair Lina M. Khan said: “Too often, businesses make people jump through endless hoops just to cancel a subscription. The FTC’s rule will end these tricks and traps, saving Americans time and money. Nobody should be stuck paying for a service they no longer want.”

Under the new rule, customers will not have to phone or us a chatbot to cancel a subscription made online, and customers who set up a subscription in-person will be able to cancel them over the phone or online.

Businesses will also have to obtain informed consent before converting a free trial into a paid subscription.

Similar measures were introduced in the UK through the Digital Markets, Competition and Consumers Act 2024, according to the BBC.

The Act requires businesses to remind customers when a free or low-cost trial is ending, and to ensure subscriptions can be easily terminated.