NCL urges FTC to strengthen consumer protections for subscriptions
June 26, 2023
Media contact: National Consumers League – Katie Brown, katie@nclnet.org, 202-823-8442
Washington, D.C. – Last week, the National Consumers League (NCL) filed comments urging the Federal Trade Commission (FTC) to strengthen its proposed rule that would provide consumers with greater transparency and control over their subscriptions. NCL weighed in alongside the National Consumer Law Center (NCLC) and other consumer advocacy organizations. While strongly in support of the Commission’s proposed updates, NCL urged the FTC to strengthen its rule even further with the following changes:
- Stamp out free trial and subscription traps by requiring sellers to ask for consumers’ consent to automatic charges right before a subscription begins. Too many businesses depend on their customers forgetting to cancel a free trial before they get charged. Consumers should be able to utilize a free trial without committing to paying for the full service.
- Keep consumers informed with notification prior to each recurring charge. Just like free trial traps, many individuals forget about an enrolled subscription until the money is taken from their bank account. Businesses should be required to give consumers a heads up before they charge them.
In updating its Negative Option Rule, the FTC is proposing numerous safeguards that would benefit consumers, such as requiring sellers to make subscription cancellation as easy as signing up. Additionally, the Commission’s proposal would require better disclosure of the terms of an automatically renewing subscription and compel businesses to send consumers annual reminders informing them of their ongoing subscription.
“No honest business should depend on their customers forgetting that they’re paying money to turn a profit. Unfortunately, Americans lose billions of dollars each year to unwanted and unnoticed subscriptions,” said NCL Public Policy Manager Eden Iscil. “The problem is even worse for younger individuals, with members of Gen Z and Millennials reporting higher subscription sign-ups compared to older consumers. The FTC’s proposed updates to its Negative Option Rule go a long way toward bringing transparency and control back to the consumer. If the Commission implements our suggested changes, this rule could vastly improve the consumer’s experience with subscription plans.”
The following organizations signed on to the comments:
- Consumer Action
- Consumer Federation of America
- Demand Progress Education Fund
- National Association of Consumer Advocates
- National Consumer Law Center (on behalf of its low income clients)
- National Consumers League
To read NCL’s full comments to the Commission, click here.
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About the National Consumers League (NCL)
The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit nclnet.org.
