Well, hello there membershippers. Welcome to another episode of the Membership Geeks

podcast. Your go to resource for building a successful

membership business. I'm your host, Mike Morrison, founder of the

Membership Geeks. And today, I'm diving into a significant

development in this industry that directly

impacts all of us as online membership owners.

So as of the 15th January this year,

2025, so just a couple of weeks ago, the Federal Trade Commission

in America have officially put into effect their

click to cancel regulation. Now these new

rules mandate a few things, but the most important is that

cancelling a subscription must now, by

law, be as straightforward as

signing up for 1. This is something we've championed for

years, making the cancellation process for your membership

simple and hassle free. Now, it's not just best

practice, it's the law. Now, before we dive in a

little bit more, if this is your first time listening to the Membership Geeks

podcast, first of all, welcome. What took you so long to find

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also the more reviews we get, the more people we reach. The more people we

reach, the more memberships we help, and the more we can help shape

this industry for the better through

talking about things like the click to cancel regulations.

So, what exactly do the click to cancel

regulations entail? Well, at its core, the rule requires

businesses to provide a cancellation process that is as

easy as the enrolment process. So this is aimed at the entire

subscription industry. It's not necessarily

created to specifically target online memberships, but of course

we fall into that camp, alongside things like subscription

boxes, alongside things like streaming services, and so on.

If a customer can sign up for your membership online,

they should be able to cancel their membership online

without any unnecessary hurdles. So this means

no more forcing customers to call a customer service helpline,

or to navigate through endless menus, or to send an

email to the support team that they have no idea how long they'll

have to wait to actually have their cancellation request honored. It

means no more enduring retention tactics that are

designed to make them jump through hoops and frustrate them

into staying. The FTC's goal is to eliminate

those sort of bad practices that have long plagued the subscription

industry and, indeed, the online membership space. So

for us as membership site owners, this regulation has several key

implications. First and foremost, we need to audit our current

cancellation processes. Is it truly as easy

to leave your membership as it is to join?

If not, we need to make immediate changes to comply

with the new rule. So this might involve adding

a clearly visible cancel membership button or link

within the user account area on your membership or simplifying

the steps required to terminate a subscription. A lot of membership owners

have chosen deliberately to not allow their

members to manage their own account, to not give them the ability

to cancel their own membership. If that is you, this is

something you need to fix. This is something you need to address immediately

in order to ensure you are complying with these rules. You need

to simplify the steps required to terminate a subscription, and if someone

can click a button and sign up online without needing to

contact you directly, they should be able to click a button and cancel

that subscription in the same way. The FTC

emphasizes that the cancellation mechanism, the cancellation

process should be simple and accessible and most

importantly should mirror the medium used for signing up.

This is where the whole thing about, you know, phoning a call center

to cancel a subscription that you created online. That's one of the main

reasons these rules have been created because a lot of companies do that. We've all

had that where we wanna cancel a cell phone plan or we wanna

cancel a TV subscription, a cable subscription. And even though

we could sign up really fast and really easy online, if we wanna cancel,

we've gotta ring a number to premium rate number. We've got to

jump through all sorts of hoops and go through all sorts of departments that'll try

to sell to us. It cannot be like that anymore and it can't

be like that for your membership. And that also means

you cannot make people email you to cancel.

That can't be the only mechanism for cancel because they haven't had

to email you to join. The mechanism needs to be simple,

accessible, and it needs to mirror the medium used for

signing up. But that's not all. These new rules go beyond just

the cancellation process. They also set strict requirements

around clearly communicating the terms of your membership

and making sure nothing has been misrepresented. The FTC is

really starting to crack down on companies that use vague, confusing, or misleading

language to hide key details about subscription. You can

no longer put things about automatic renewal or cancellation

processes buried deep in your lengthy website terms and

conditions or in easy to miss small print.

Disclosures about pricing, renewal terms, and cancellation processes

must be clear, conspicuous, and in plain language that any

customer can understand. Now, while this might be considered a

gray area personally, I would say this also applies

to those memberships that you see where what they're charging

is actually an annual price, but they

present it and they position it and they word

it in terms of how much that costs per month.

You've probably seen this, been on sales pages, seen pricing

sections that show a product costing $20 a

month, but actually that's an equivalent

cost. That is what the annual cost divided

by 12 works out like. You can't actually sign up to a subscription that cost

$20 a month. It's deliberately misleading.

It's misrepresenting. It can easily be

misunderstood by a customer, and this sort of thing is what the

FTC is going to really start crunching down on. This

focus on clarity and honesty is especially relevant when it comes to marketing your

membership. You can't lean on vague phrases like limited time

offer or cancel any time. You can't put

anything out there that could be misinterpreted, that

isn't absolutely clear. If your promo

materials or your website copy over promises or fails

to disclose key information, you're opening yourself up to problems.

The FTC is taking a firm stance, misrepresenting your

subscription service or omitting critical

details about what someone is signing up for, what the terms of their

subscription is, how they were cancelling, all of that is just as

harmful as making it difficult to cancel. So this

isn't just a little add on to the click to cancel aspect.

It's really about protecting the customer and ensuring that

everything is absolutely clear when someone's signing up as to what they're signing up

for. So the practical takeaway here for you as a membership owner is

that every interaction you have with a potential or current member must be

built on trust and transparency. This means revisiting not just

your cancellation process, but also your sign up process,

your sales page, your check out, your marketing materials, the way in which you

communicate about pricing and benefits. Ask yourself, is

the language clear? Would someone with no prior experience

in memberships or subscriptions understand the terms you are

presenting? You have to ensure it's idiot

proof. If the answer is no, if there's even a shred

of doubt, it's time to simplify and clarify.

Now, really, this just underscores the broader principle that we've

been advocating for all along. You have to respect your

member's autonomy and you have to act in good faith. By

providing a straightforward cancellation process, making the

decision to cancel difficult but the process easy, you build

trust and goodwill. Members are more likely to return or to

recommend your membership if they know they're not locked in against

their will, if you haven't burnt your bridges with them by making it far

too easy for them to leave. Transparency and ease

of use and just doing business in a good

customer friendly way are not just now regulatory

requirements, they are pillars of a positive member

community. Now it's also to note that while the click to cancel

rule is now in effect, additional requirements and

additional expansions that are on the horizon, future phases of

this will introduce stricter standards around

communication and disclosing details about your membership.

It's also going to introduce explicit customer

consent for automatic renewals. So that's gonna be a little

more complex. That means we're gonna be even more diligent about how we

communicate the terms of our subscriptions and how we obtain that consent

from our members, and a lot of that is gonna need to come from

payment providers and from membership plugins and platforms.

Staying ahead of those changes will not only keep us compliant, but also enhance

the trust that our members place in us. Now you may be

thinking, okay. Well, I'm not based in America. What the FTC

have now put in place doesn't really apply to me. But if

you are targeting members in America, if you have customers

in America, this applies to you. And let's face it,

unless you're going to have a completely different sign up and cancellation process

for your American members compared to other members, it's

better to just exercise the best practice stuff that

these regulations now enforce. And even if you do

decide, well, you know what? I'm not gonna pay attention to that because it's not

relevant in my country. It's only a matter of time. This isn't

some wild out there set of regulations that have been brought

in. This actually is long overdue. And

so even if it's not law, even if it's not required in

your place of business right now, it will be.

And even if it never happens, it's just a better way of doing business.

We've long since advocated make the decision to cancel

difficult, but the process easy.

Because if you make it hard for someone to leave, they're not likely

to ever come back or ever recommend anyone join even if they'd had a

phenomenal member experience right up to the point at which you blew

it with a poor cancellation process. But now,

those aren't the only repercussions of handling

cancellations in the wrong way. Now, if you do this wrong,

you're potentially going to get into legal issues as

well. So to wrap things up, these new regulations mark a

significant milestone in the subscription industry's evolution,

not just online memberships, but it aligns perfectly with the values we

always promote here at Membership Geeks. Simplicity, transparency, and

respect for our members. So now is the time

to review and refine your cancellation processes, not just to comply

with the law, but to take care of the overall member

experience too. Remember, a member who leaves on good terms is more likely to

return, and even if they don't, they're more likely to advocate for your

membership. Alright. That is it for today's episode.

Hopefully, this has proven useful, especially if you'd not realized that

these laws and these regulations were coming into effect. Hopefully, this has given you the

nudge and the kick up the butt to ensure that you are handling your

cancellation process the right way, not just to stay

on the right side of these regulations, but just because it's a better

way to run your membership. That's it for me. I'll be back again next time

with another episode of the membership geeks podcast. Bye for now.