By The various major streaming video services are all set to be impacted by a new rule from the U.S. Federal Trade Commission. Dubbed the ‘click to cancel’ rule, it was issued on Wednesday and will go into effect in approximately six months.
The ruling requires businesses to make it as easy to cancel subscriptions and memberships as it is to sign up, specifically saying the cancellation method must be “at least as easy to use” as the sign-up one.
Also required will be consent to convert auto-renewals and free trials to paid enrollments, among other things. The rule also prohibits requiring consumers who signed up through an app or a website to go through a chat bot or agent to cancel.
This ruling impacts all businesses with subscriptions and will heavily impact those who go out of their way to make signing up easy but cancelling an account or subscription a lengthy and difficult process (most famously gyms, telecoms and certain retailers).
The rule comes as streaming services aim to slash customer churn rates – subscriber retention has become a critical factor as growth of the streaming sector has slowed in recent times.
Meanwhile the Motion Picture Association, in a joint filing with the Entertainment Software Association, has opposed some provisions of the rule. They call it “unworkable in many respects” and claim it will do “little to protect consumers from the minority of bad actors that engage in the most egregious forms of deceptive negative option marketing.”
Source: THR
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