A look at what it involves

The new Click to Cancel rule is the final element in a series of new requirements, and is intended to make it much easier for customers to cancel subscription sign ups. 

Kirkland & Ellis law firm writes that the rule will impose:

"On October 16, 2024, the Federal Trade Commission (FTC) issued a final rule that imposed a series of new requirements on companies employing subscription services, auto renewals, free-or-fee-to-pay conversion services, and other similar services that obligate consumers to make recurring purchases unless they take affirmative steps to cancel (collectively, 'negative options')."

The BBC writes:

"Businesses, including retailers and gyms, will also have to get consent from customers before renewing subscriptions or converting free trials into paid memberships."

It's important to note as well that the FTC says it's acting after "receiving more than 16,000 comments from the public", which for businesses that believe sustainable success is built on customer service and listening to clients, makes it a helpful piece of consumer research in its own right. That knowledge can be viewed as helpful rather than a hindrance, giving insights into how to help customers feel supported and confident in their purchase and provider.

The FTC lists the key details as providing a consistent legal framework by prohibiting sellers from

• Misrepresenting any material fact made while marketing goods or services with a negative option feature;
• Failing to clearly and conspicuously disclose material terms prior to obtaining a consumer’s billing information in connection with a negative option feature;
• Failing to obtain a consumer’s express informed consent to the negative option feature before charging the consumer; and
• Failing to provide a simple mechanism to cancel the negative option feature and immediately halt charges.
  

Regulatory compliance made easy

Whether it's the Click to Cancel rule or other areas of regulation, as with all areas of subscription business, it has to be assumed that this is one that's subject to continuous change and evolution as a consequence of the success of the subscription business model. 

Therefore, having a system in place that allows you to roll with the changes, adapting as you go without making those changes cumbersome or worrying to implement, is more important than ever.

keylight is a subscription business platform designed not only to facilitate the wants, needs and long-term success of subscription businesses, but with the inbuilt belief that user experiences are the foundation of that success. 

Where most business platforms are designed with the billing system first, keylight is configured with user experience as the primary design influence, and all elements work to that outcome, knowing it's the driver for commercial success. 

Every element, including billing, is built to optimum capability, but with end-to-end function in mind rather than isolated transactions. As a result, it supports the customer, the business, and team members in doing the best job possible, maximising both technological capability and human skill.

Enabling the accurate and easy implementation of rules and regulations is an essential part of facilitating good corporate governance. To that end, keylight has multiple layers of inbuilt functionality so it can adapt both to new rules and a variety of different jurisdictions if your company grows to operate across different global territories.  

A customer portal

keylight's self-service customer portal is connected to the central subscription engine, so there's no need to build front end or custom logic to streamline customer subscription contract changes. Customers can cancel their subscription at any time via the portal, giving them both the feeling of and actual autonomy over their subscription. This not only complies with regulations but also gives customers a sense of security and transparency in your system, which helps to foster an invaluable sense of trust.

A fully configurable subscription cancellation journey

From clear cancellation buttons to a customised journey, thanks to keylight's app builder you can easily configure a fully customised subscription cancellation journey that meets regulatory requirements, supports your customer, and also gives you valuable learning and win-back opportunities. It can include steps to help you to understand the reasons a customer is choosing to cancel, and offer the option to pause the subscription or downgrade instead, all whilst making the process feel smooth and without making the customer feel as though you're trying to prevent them from exiting.

Customisable communications

Communication is usually where relationships break down, including those between businesses and customers. Communicating effectively with customers to ensure you have their consent for data use and other activities is a core part of the regulatory environment, ensuring their active rather than passive complicity.

You can make getting consent from customers simple both for you and your customers, with keylight's fully customisable email templates, which can be triggered based on renewal notice periods and trial notice periods. Within these emails you can embed consent documents, complete with checkboxes at the point of check-out, so that when the customer confirms the order, the system automates notification emails that include consent text, also enabling the customer to opt out.