FTC Proposes Rule to Make It Easier for Louisiana Residents to Cancel Cable Plans
When it comes to canceling memberships and subscriptions, there are plenty of reasons we do it - money, time, and circumstances all change, meaning we make changes to accommodate. It's especially painful, though, when you have to go through an annoyingly long cancelation process, and there are plenty of times when it almost seems like it's not worth it.
The Federal Trade Commission, the government agency in charge of protecting consumers from predatory, unethical, and illegal practices, is preparing a new rule that would make one of the most annoying cancelation processes - canceling a TV service - a whole lot easier.
The Verge has more on this new rule.
This morning, it announced a notice of proposed rulemaking it dubs “click to cancel,” requiring companies to make ending a subscription equivalently simple to signing up for one. That includes letting people use the same method for both actions — so a business can’t, for instance, let someone sign up for a service online but make them call a phone number to cancel.
But that's not all.
'Click to Cancel' and More
As part of the new rule, companies will still be allowed to offer you perks, like discounts and other special deals, to try to keep you as a member. But, the FTC rule would force companies to give you an up-front opt-out option so you can bypass the whole sales pitch.
The cable companies will also be required to notify you of “negative option” programs, which are programs that automatically renew if you fail to cancel them (think of those "free" HBO packages you sometimes get but forget to cancel after three months).
“Companies should not be able to manipulate consumers into paying for subscriptions that they don’t want,” FTC chair Lina Khan said ahead of the FTC announcement. “We get countless complaints about this.”
The rule isn't final. By law, the agency has to have a public comment period, which is currently open.
In its press release, the FTC also included a "fact sheet" to break down the rule change.
Cord-Cutting Still Going Strong
One of the primary reasons people are canceling their TV subscriptions in recent years is cord-cutting - the practice of getting rid of traditional TV viewing in favor of online streaming.
Cordcutting.com has the most updated stats on people switching over:
Ninety-three percent of American adults access streaming video platforms, while only 40 percent have cable or satellite service. The average viewer spends $50 monthly on streaming services across four different platforms, with Netflix being the most popular.
HBO Max scored the highest viewer approval ratings and registered high for potential new subscribers. Combined with its impending merger with Discovery+, the platform is ready to contend as a top service.
One in three of the remaining cable/satellite subscribers would cancel their connections if their preferred sports content was available on streaming platforms.
More than one in five streamers borrow passwords to access platforms without subscribing, with Netflix the most affected service. This practice of “mooching” will cost the industry approximately $2.4 billion this year.
More than one in four streamers plans to cancel at least one of their subscriptions this year. Forty-four percent said they’re canceling due to a lack of interesting content.
The FTC's rule may ultimately make it easier to cancel a cable subscription and move over to streaming services. And while cutting the cord is a popular trend, rising streaming prices may have people going back to more traditional TV.
But, the FTC's rule is just a proposal for the moment. The issue will be decided later this year.