FTC Cracks Down on App & gym Subscription Traps

Are you tired of those sneaky subscription renewals or free trials turning into paid plans without noticing? The Federal Trade Commission (FTC) has your back with a new “click to cancel” rule designed to fight off subscription traps—a constant headache in sports and technology. Now, businesses can’t quietly renew your subscriptions or upgrade you to a paid service without explicit consent. This move is a big win for consumers tired of wasting time (and money) navigating tricky cancellation processes.

One of the standout changes? Companies that used to rely on chatbots or endless customer service calls to wear you down will need to change their tactics. If you can sign up for a service online, cancelling should be as easy—no more listening to music or being shuffled between departments. And for those who signed up in person, businesses will still need to offer easy online or phone cancellation options, ensuring you’re not stuck jumping through hoops.

FTC Chair Lina Khan called this a significant win against the “tricks and traps” that have long burdened American consumers, who file around 70 daily complaints about these practices. Though the rule narrowly passed by a 3-2 vote, with opposition from the FTC’s Republican commissioners, it’s expected to reshape how businesses handle subscriptions. The UK introduced a similar law earlier this year, signalling a growing international push for consumer protection (Digital Markets, Competition and Consumers Act 2024).

This could spell trouble for companies that have banked on making cancellations challenging to lock in customers. Subscription-heavy businesses—think Amazon Prime, PayPal, Adobe, and even your local gym—may face higher churn rates as frustrated customers finally gain the power to leave with a few clicks. These companies must rethink their strategies to retain customers, possibly offering more flexible, user-friendly experiences to stay competitive.

With the rule set to take effect in about six months, consumers can celebrate a more transparent, hassle-free future. For businesses, especially those in streaming, software services, or any subscription-reliant sector, it’s adapt-or-lose as the playing field shifts in favour of the user.