Heads up if you’re in the US or serve US-based businesses…
New rules just dropped: The US Federal Trade Commission (FTC) just finalized its “click to cancel” rule, requiring sellers to “make it as easy for consumers to cancel their enrollment as it was to sign up.”
Seems simple enough, right?
Kind of… but there’s more to it, of course. Any time you’re using “negative option marketing,” you are now:
- Required to be transparent about all material facts before collecting billing info and charges.
- Required to “get consumers’ informed consent to the negative option features before charging them.”
- Prohibited from misrepresenting material facts about your goods or services.
The new rule also removed previous requirements, so you no longer need to:
- Remind consumers annually of the negative option feature of their subscription.
- Tell would-be subscription cancellers about plan modifications or reasons to keep to their existing agreement without first asking if they want to hear about them.
So on the one hand, you should revisit your marketing assets: Your claims, your positioning, your value propositions, your promises and benefits, etc., to make sure they’re not breaking these rules.
On the other hand, it seems you’re now free to remind potential cancellers about what they stand to lose by unsubscribing or ending their memberships.
Ultimately though, we’re marketers, not lawyers. So if you have any legal questions, better refer them to your legal team or attorney.
