Industry groups seek to block ‘Click to Cancel’ rule

Three industry trade groups have filed a lawsuit seeking to from the Federal Trade Commission's Click to Cancel rule from taking effect - Photo (c) UnSplash +

Three organizations are suing the Federal Trade Commission

The Federal Trade Commission’s (FTC) new Click to Cancel rule removed a huge consumer headache. It makes it easier to cancel an unwanted service or a subscription.

But that is apparently a big threat to cable and internet companies. Reuters reports that three industry groups have filed a lawsuit to prevent the rule from going into effect.

The Internet and Television Association, Electronic Security Association, and Interactive Advertising Bureau call the consumer-friendly rule “arbitrary, capricious, and an abuse of discretion.” Their complaint claims the FTC is trying to “regulate consumer contracts for all companies in all industries and across all sectors of the economy.”

The rule does have a massive scale. It covers every subscription that automatically renews, from your anti-virus software to your gym membership. Companies in hyper-competitive industries or whose services are not that essential see the new rule as a huge threat.

Here’s why: the rule states that a consumer must be able to cancel a service the same way they signed up for it. If they signed up online, they must be allowed to cancel online, bypassing the customer service rep who will fight tooth and nail to talk the customer out of their decision.

‘More freedom for consumers’

“The FTC, for decades has fielded thousands of complaints every year about subscriptions renewed without consent,” Teresa Murray, consumer watchdog director at Public Interest Research Group, said in an email to ConsumerAffairs. 

“The new rules give consumers more freedom to switch providers, read a different news service, buy a different pet food or none at all.” 

“Petitioners seek review of the order issuing the Final Rule on the grounds that it is arbitrary, capricious, and an abuse of discretion within the meaning of the Administrative Procedure Act, 5 U.S.C. § 701, et seq,” the lawsuit states. “Petitioners respectfully request that this Court hold unlawful, vacate, enjoin, and set aside the Final Rule and provide such additional relief as may be appropriate.” 

The Commission vote approving publication of the final rule was 3-2. Most of the final rule’s provisions will go into effect 180 days after it is published in the Federal Register, unless blocked by the courts.

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