As a seasoned consumer advocate with a lifetime of battling against corporate giants to protect the little guy, I must say that the latest move by NCTA, ESA, and IAB to block the FTC’s “click-to-cancel” rule leaves me scratching my head in disbelief.
One of the trade groups representing major U.S. cable operators and broadcasters has filed a lawsuit alongside two other organizations, aiming to prevent the Federal Trade Commission (FTC) from enforcing its recently established “click-to-cancel” rule. This rule aims to simplify the process for consumers who wish to cancel their subscriptions by making it easier to do so with just a click of a button.
On October 22nd, a group consisting of NCTA – The Internet & Television Association, the Electronic Security Association, and the Interactive Advertising Bureau filed a lawsuit in the 5th Circuit Court of Appeals. Their goal is to overturn the Federal Trade Commission’s (FTC) rule requiring an easy cancellation process for subscriptions (known as click-to-cancel).
The parties maintain that the FTC’s decision to enact the click-to-cancel final rule was unreasonable, excessive, and misused their power, as defined by the Administrative Procedure Act (5 U.S.C. § 701, et seq.). They further claim that this rule lacks a solid foundation in facts or evidence. The lawsuit also alleges that the FTC exceeded its legal boundaries, which is contrary to the U.S. Constitution.
In their lawsuit, the NCTA, ESA, and IAB kindly ask this court to declare the Final Rule invalid, void it, prohibit its enforcement, undo its effects, and grant any further appropriate remedies,” is one way of paraphrasing the original sentence in a natural and easy-to-read manner.
A representative from the Federal Trade Commission chose not to provide a statement concerning the ongoing legal action. The complaint can be accessed through the provided link, which was shared in the latest edition of the Policyband newsletter.
On October 16th, the Federal Trade Commission (FTC) announced a final “click-to-cancel” regulation, which mandates that sellers must make canceling consumer enrollment as straightforward as the sign-up process. The majority of the rule’s stipulations are scheduled to take effect 180 days following its publication in the Federal Register. For more information about this new rule, you can refer to the FTC fact sheet available at the provided link.
The revised rule by the FTC will affect nearly all “negative option” programs found in various media. These types of contracts are associated with approximately 1 billion active subscriptions within the U.S. Essentially, the term “negative option marketing” refers to promotional offers that have a common characteristic: they assume consent if the customer does not explicitly decline or take affirmative action to reject the offer.
The lawsuit filed by trade groups argues that the FTC’s click-to-cancel rule considers any “negative option” deals as potentially misleading unless they adhere to rigorous new regulations. These include specific requirements for disclosures, how these disclosures are presented, a separate consent procedure, restrictions on truthful communication from company representatives with customers, and detailed instructions for canceling services, among other things.
As a passionate cinephile, I’d like to highlight that some notable industry players belong to the National Cable Television Association (NCTA). These include Comcast/NBCUniversal, Charter Communications, Cox Communications, Disney, Paramount Global, Sony Pictures Entertainment, and Warner Bros. Discovery. On the other hand, the Electronic Security Association (ESA) counts ADT among its members.
The FTC’s “click-to-cancel” rule forbids merchants from misrepresenting significant details while using subscription marketing, insists that sellers provide essential information and billing details upfront before charging consumers, and demands that sellers obtain explicit consent from consumers before billing them for these subscriptions.
As a movie buff putting things into my own words, I’d say: “I recently learned that the Federal Trade Commission (FTC) is updating its 1973 Negative Option Rule to keep pace with our rapidly evolving digital economy. The aim is to curb any shady or misleading subscription, membership, or recurring payment schemes, making it harder for businesses to trick consumers into signing up for their products and services.
Frequently, businesses require customers to navigate numerous steps to cancel their subscriptions,” said FTC Chair Lina Khan when introducing the click-to-cancel regulation recently. “The FTC’s new rule will put an end to these deceptive practices, helping Americans save both time and money. No one should be forced to continue paying for a service they no longer require.
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2024-10-24 18:47