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Click to Cancel? Not So Fast, Says Industry…

Writer's picture: Stephanie Thum, Ph.D., CCXPStephanie Thum, Ph.D., CCXP

CX friends and enthusiasts, you didn’t really think it’d be that simple, did you?


In mid-October, the U.S. Federal Trade Commission (FTC) announced its much-anticipated “Click to Cancel” rule, aimed at making life a bit easier for millions of customers. You may have noticed a wave of celebratory posts about it on social media.


The rule’s goal? To ensure that, from a customer’s perspective, canceling a subscription is just as easy as signing up for one. If you can subscribe with a click, then you should be able to unsubscribe the same way—without wading through a river of sludge to stop your credit card from being charged after you’re no longer interested.


The rule targets unfair or deceptive practices surrounding subscriptions, memberships, and other recurring payment programs in an increasingly digital economy. However, it hasn’t taken effect yet.

And now, formal roadblocks may be on the horizon.


What’s the Issue?


This week, multiple industry trade groups filed petitions to block the rule, arguing that it was arbitrary and too “onerous” to implement. With more than a billion paid contracts potentially impacted, the logistical burden is too great—especially for smaller businesses. Additionally, they argue that the FTC overstepped its authority in taking up the matter.


Who’s Pushing Back?


The petitioners include five prominent groups across two separate court petitions:


  • The Electronic Security Association (ESA)—The largest trade group in the U.S. for the electronic security and life safety industry. Its members handle alarm systems for fire detection, video surveillance, and access control for homes, businesses, and government buildings. ESA represents companies that employ 500,000+ people and serve 34+ million customers.

  • Interactive Advertising Bureau—A key representative of the digital advertising industry. IAB ensures that advertisers, agencies, and tech firms can effectively reach their audiences through online and mobile platforms. Its member companies collectively reach billions of consumers through digital ads and media.

  • NCTA – The Internet & Television Association—Representing major U.S. cable operators, broadband internet providers, and content creators. Its members provide broadband, video, and voice services to 200+ million customers.

  • The U.S. Chamber of Commerce—The largest business federation in the U.S., representing the interests of businesses of all sizes across various sectors. It advocates for pro-business regulation, tax, and trade policies across federal, state, and local governments.

  • The Georgia Chamber of Commerce—Georgia’s largest business organization that promotes economic growth, advocates for business-friendly policies and supports initiatives that benefit the state’s economy.

 

A Surprise? Not Exactly

The opposition shouldn’t come as a surprise. Industry groups exist to protect and advocate for their members’ interests. A dissenting statement from an FTC commissioner, issued when the final rule was announced, hinted at potential trouble. One cause for dissent: the final rule didn’t sufficiently demonstrate that the problem was widespread.


Side note: The U.S. government received 16,000+ public comments during the rule-making process. While there were some concerns, the majority signaled support for the rule, which modernized the Negative Option Rule since 1973. A negative option means a company can automatically charge you for a product or service unless you cancel it. The FTC gets about 70 consumer complaints a day, up from 42 complaints per day in 2021.


As the legal battle unfolds, it remains to be seen whether the "Click to Cancel" rule will survive the pushback or face more revisions. For now, customers and businesses alike will continue to grapple with the potential implications of this rule. Stay tuned—the debate is far from over.


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