FTC Simplifies Gym Membership Cancellation Process

The US Federal Trade Commission (FTC) has implemented measures targeting subscriptions that are challenging to cancel. On Wednesday, it adopted a final “click-to-cancel” rule, mandating that businesses simplify the cancellation process to be as straightforward as signing up.

According to this rule, businesses are prohibited from requiring customers to use a different cancellation method than the one used for signing up. For instance, if a customer signed up with an online form, companies cannot insist on cancellation via phone call or live chat. Furthermore, the FTC will require businesses to transparently disclose subscription terms and obtain customer consent before any charges are made.

The rule, initially proposed last year, encompasses all automatically renewing subscriptions, including challenging-to-cancel gym memberships, magazine subscriptions, and monthly services like Amazon Prime. It also applies to free trials that incur charges if not canceled in time, as well as continuity plans where periodic product shipments are received until cancellation.

FTC Chair Lina Khan stated in a press release that businesses often subject individuals to numerous obstacles when canceling a subscription. She emphasized that the FTC’s rule aims to eliminate these deceptive practices, ultimately saving Americans time and money.

The majority of the provisions under the “click-to-cancel” rule are set to become effective 180 days after being published in the Federal Register.

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