US moves to ban shady subscription auto-renewals after FTC court loss

Picking up where the FTC left off, lawmakers announced the Click to Cancel Act, which requires companies to “provide a simple, direct mechanism to cancel a subscription and immediately stop charges.” It also requires companies to obtain clear and direct consent before signing customers up for auto-renewals.

John Breyault, vice president of public policy, telecommunications, and fraud for the National Consumers League, suggested that the “simple, commonsense policy” is “long overdue” and passing it “could be the easiest vote for Members of Congress to cast this year.”

Senator Ruben Gallego (D-Ariz.) introduced a companion bill in the Senate, which could help the bill advance quickly through both chambers of Congress. But it’s unclear if the measure will have bipartisan support, as both Republican FTC commissioners notably voted against the rule and only Democrats have so far attached themselves to the bill. Democrats will likely point to popular support for the rule to get Republicans onboard, with Breyault claiming it could be the “most popular” action Congress could take this year.

“Too many companies are relying on shady fine print and confusing cancellation processes to lock customers into charges they never agreed to,” Gallego said. “They’re counting on customers to forget, give up, or get stuck in the fine print so they can keep charging their card every month.”

If the law is passed, violations would be considered “unfair or deceptive acts or practices” under the FTC Act. Any company found to be frustrating the cancellation process could face significant fines—perhaps more than $50,000 per violation.