On Wednesday, the Federal Trade Commission (FTC) finalized a new rule aimed at simplifying the process for consumers who wish to cancel unwanted subscriptions and memberships.

This regulation, known as the “click-to-cancel” rule, is designed to ensure that retailers and businesses cannot mislead customers regarding subscription services. Furthermore, they must secure the customers’ agreement prior to imposing any charges for memberships, auto-renewals, or services that promote free trial options.

According to the FTC, companies are now required to inform customers when free trials or other promotional deals will conclude, and they must provide the same ease in terminating recurring subscriptions as they do for starting them. Most of these new requirements are expected to become effective 180 days after they are published in the Federal Register.

FTC Chair Lina Khan commented on the matter, stating, “Frequently, companies force customers to make extensive efforts just to cancel a subscription. This rule aims to eliminate those deceptive practices, ultimately saving consumers both time and money. No one should have to continue paying for a service they no longer wish to use.”

The Biden administration has included this proposal within its “Time is Money” initiative, which surfaced in August and seeks to reduce consumer-related frustrations. This initiative promises new regulations across various sectors, including health care, fitness memberships, and media subscriptions.

However, the U.S. Chamber of Commerce criticized this approach, arguing that “overly strict regulations that micromanage business practices” will inevitably lead to increased costs for consumers.

Vice President Kamala Harris has emphasized the importance of the “click-to-cancel” rule, pledging support for this initiative if she were to be elected as president.

The FTC passed the rule with a narrow 3-2 vote. The agency initiated this proposal in March and collected over 16,000 comments on it from a variety of stakeholders, including consumers, advocacy organizations, and industry representatives.

Furthermore, the Biden administration continues to focus on addressing hidden fees and deceptive charges that obscure the total price for services such as concert tickets, hotel bookings, and utility bills.