Why the FTC’s 'click-to-cancel' rule is a win for consumers, as well as the systems tasked with resolution

Quick recap: The Federal Trade Commission’s new "click-to-cancel" rule is set to change the subscription game for consumers. The rule, which will be fully effective in 180 days, requires companies to make canceling a subscription as straightforward as signing up for one.

Zooming in: The new regulation impacts almost all companies using negative option marketing programs, which involve automatic billing unless the customer opts out. "Too often, businesses make people jump through endless hoops just to cancel a subscription," Commission Chair Lina M. Khan said in a statement. "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."

Why it matters: From streaming platforms to meal kits, many companies have used confusing or unclear terms that make it easy to subscribe but difficult to stop. Notably, the FTC also added that businesses must obtain express consent from customers before they’re billed and ensure that all terms are clearly laid out before taking payment information.

• For consumers, this means they can say goodbye to the frustrating "hoop-jumping" process of canceling subscriptions.
• Meanwhile, companies with robust resolution management systems will benefit from the unintended side-effect of reducing negative-sentiment support cases and handling cancellation from unhappy customers.

Bottom line: The shift highlights the growing focus on consumer rights, giving people more control over recurring payments and eliminating the friction often associated with canceling services. Businesses, in turn, may need to adjust their retention strategies to ensure a seamless customer experience.