FTC "Click-to-Cancel" Rule: A Big Step for Free Trial Subscriptions

The Federal Trade Commission (FTC) recently announced a new “Click-to-Cancel” rule designed to simplify the subscription process and protect consumers from complex, difficult-to-cancel subscriptions. This rule marks a major shift in consumer rights within the digital subscription economy, holding businesses accountable to high standards of transparency and ease of cancellation.

Let’s break down what this new rule means for consumers, businesses, and our take here at freetrials.com. Spoiler alert, we’re fully supportive!

What is the “Click-to-Cancel” Rule?

The FTC’s “Click-to-Cancel” rule is a response to consumer complaints over subscriptions that are easy to start but difficult to end. The rule is designed to ensure that canceling a subscription is as straightforward as signing up for it, removing any common “friction” tactics that companies use to retain subscribers. Here are the two main highlights:

Easier Cancellation Process:
- Companies are required to make canceling subscriptions as easy as signing up. This means that if a customer subscribes online, they should be able to cancel online without needing to call, email, or jump through unnecessary hoops.
Simple Opt-Outs from Retention Offers:
- If businesses make retention offers during the cancellation process (such as discounts or alternate plans), they must provide an option for consumers to easily decline these offers. This prevents any obstacles in the way of completing the cancellation.

What the FTC’s “Click-to-Cancel” Means for Subscribers

For consumers, the FTC’s rule solves some of the longstanding issues with canceling subscription-based services. Here’s how the “Click-to-Cancel” rule creates a healthier digital marketplace for consumers:

Greater Control Over Subscriptions:
- With an easier cancellation process, consumers can feel more confident in their decision to try new services. If you want to cancel, you won’t be trapped in a cycle of difficult-to-cancel subscriptions anymore.
Reduced Frustration:
- For many, navigating a cancellation process filled with obstacles has been a deterrent to trying new subscriptions. This rule reduces that friction, making it easier for consumers to explore services without worry.
Clear and Direct Options:
- Having a straightforward opt-out option from retention offers ensures that consumers have control over whether they want to explore a discount or simply complete the cancellation.

What the FTC’s “Click-to-Cancel” Means for Businesses

For businesses, the new FTC rule is a call-to-action requiring specific measures for how subscriptions are managed. These three (3) specific measures are now required to be implemented by no later than April 14, 2025:

Provide an Easy Cancellation Mechanism:
- Businesses must provide a simple mechanism for consumers to cancel the negative option feature and immediately stop all recurring charges. The cancellation mechanism must be as easy to use as the mechanism used to consent to the negative option program.
Clear Disclosures of Material Terms:
- Businesses must clearly and conspicuously disclose all material terms before obtaining a consumer’s billing information. Material terms include: that consumers will be charged for the good or service, or that those charges will increase after any applicable trial period ends, and, if applicable, that the charges will be on a recurring basis.
Obtain Explicit Consent:
- Businesses must obtain a consumer’s express informed consent to the negative option feature before billing begins. This requires a consumer’s unambiguous affirmative consent specifically for the negative option feature, separate from other portions of the transaction.

The FTC warns that failure to comply may lead to enforcement actions, including civil penalties and orders for consumer redress. Here’s a quick fact sheet they’ve provided:

How Freetrials.com Aligns with the FTC’s “Click-to-Cancel” Ruling

Since founded in 2019, freetrials.com has long stood on the side of transparency and fair consumer practices. Our entire platform is predicated on transparency & education, giving SaaS shoppers all the details upfront for any given sign-up flow,

It’s a very common issue we hear about from our readers! We’ve all been there one time or another..

Maybe you’ve tried to cancel a subscription and a charge lapses leaving you scratching your head. Or maybe the path to canceling was so convoluted that you put it on the backburner – watching unwitting charges hit your account month after month. It’s the worst.

We believe that good ole’ real world value is the key to retention – not cagey, hard-to-exit, confusion tactics! So long as this ruling doesn’t continue to extend too far into businesses’ fair-use practices, we see this as a great thing.

Long before this ruling, when we launched in November of 2019, we prioritized making each free trial offer as clear, accessible, and easy to understand as possible:

1. We Breakdown Exactly What’s Required, Upfront!

For every brand we list on freetrials.com, we do our best to provide any and all required information:

What personal information is required to sign-up? We tell you the exact information each company requires to start the free trial offer. We believe this is paramount to know before deciding if it’s something they’re comfortable with before choosing to sign-up.
Is there a Payment or Credit Card Required? Is it truly “free?” If so, is a credit card required?
What are the specifics of the free trial offer? We provide specifics on each free trial, including duration, options after the trial, features, and any limitations.
Straightforward Cancellation Instructions: We include specific information on how to cancel each trial, in the event the service doesn’t meet your needs.

2. Researched Educational Content to Empower Consumers

We don’t stop at listing free trials. Freetrials.com is designed to help users thoroughly understand each service through our FAQs, guides, and side-by-side comparisons. This educational content is carefully crafted to simply answer any common questions while giving consumers the clarity they need to make informed decisions.

3. Visual Walkthroughs of Each Sign-Up Process

Additionally, freetrials.com offers video tutorial shorts (~30sec each) that show you exactly what you’re stepping into by signing up for any given free trial offer. These tutorials provide a quick, visual overview of each step, so users know exactly what they’ll see when they sign-up. What better way to know what’s asked of you as a consumer than a quick visual journey of the flow itself!

Michael McGehee, founder of freetrials.com, shares his take on the FTC’s ruling:

“Canceling subscriptions should be just as easy as keeping them. We all deserve to know exactly what is required before deciding to sign-up for any introductory offer, free trial, or otherwise. At freetrials.com, we see this as an opportunity for businesses to build trust and provide clear information to their consumers.

The FTC’s ‘Click-to-Cancel’ ruling fully aligns with our mission to help everyone make informed choices before starting any online services.”

Ultimately, the FTC’s “Click-to-Cancel” rule is a positive milestone for consumer rights, helping reduce hidden terms and frustrating cancellation processes. At freetrials.com, we’re committed to continuing our mission of delivering clear, user-first information that empowers consumers to explore new services without any surprises.

Let’s all embrace transparency & convenience in the world of subscriptions!

Happy Trials,
~ the freetrials.com team