The subscription model is undergoing a transformation with the Federal Trade Commission (FTC) introducing the new “Click-to-Cancel” rule—a regulation aimed at simplifying the cancellation process and safeguarding consumers from tricky subscription practices. In a recent podcast episode of “As It Happens with Nil Köksal, Chris Howden”, Davis+Gilbert Advertising + Marketing partner Paavana Kumar shared her perspective on the significance of this change for businesses and marketers.
At 49 minutes Paavana explained that increasing consumer frustration and complaints about the difficulty of canceling subscriptions spurred the FTC’s decision. The new rule mandates that canceling a subscription must be as seamless as signing up, whether the transaction occurs online, over the phone, or in-person.
“This final rule marks a pivotal moment for the subscription industry,” said Paavana. “Companies will need to revise their cancellation processes to comply with the FTC’s guidelines, and the Click-to-Cancel provision is just the start of what will be broader changes to subscription management.”
This development signals a shift in how businesses must handle recurring billing models, and understanding the implications of the FTC’s rule is crucial for navigating the evolving landscape of consumer protection.
For more on the “Click-to-Cancel” rule and Paavana’s insights, listen to the full episode.