Click to Cancel Will Be Easier for Consumers, Federal Trade Commission Announces
/The Federal Trade Commission has announced a final “click-to-cancel” rule that will require sellers to make it as easy for consumers to cancel their enrollment as it was to sign up.
“Too often, businesses make people jump through endless hoops just to cancel a subscription,” said Commission Chair Lina M. Khan. “The FTC’s rule will end these tricks and traps, saving Americans time and money. Nobody should be stuck paying for a service they no longer want.”
According to the FTC, the updated rule will apply to almost all negative option programs in any media. The rule also will prohibit sellers from misrepresenting any material facts while using negative option marketing; require sellers to provide important information before obtaining consumers’ billing information and charging them; and require sellers to get consumers’ informed consent to the negative option features before charging them.
The new revised rule is part of the FTC’s ongoing review of its 1973 Negative Option Rule, which the agency indicates is being modernized to combat unfair or deceptive practices related to subscriptions, memberships, and other recurring-payment programs in an increasingly digital economy where it’s easier than ever for businesses to sign up consumers for their products and services.
The FTC’s mission is protecting the public from deceptive or unfair business practices and from unfair methods of competition through law enforcement, advocacy, research, and education.
Most of the final rule’s provisions will go into effect 180 days after it is published in the Federal Register. Commission approval and publication follows the March 2023 announcement of a notice of proposed rulemaking which resulted in more than 16,000 comments from consumers and federal and state government agencies, consumer groups, and trade associations, according to FTC officials.
While negative option marketing programs can be convenient for sellers and consumers, the FTC receives thousands of complaints about negative option and recurring subscription practices each year. The number of complaints has been steadily increasing over the past five years and in 2024 the Commission received nearly 70 consumer complaints per day on average, up from 42 per day in 2021, according to data released by the Commission.
The final rule will provide 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.
Following an evaluation of public comments, the Commission has voted to adopt a final rule with certain changes, most notably dropping a requirement that sellers provide annual reminders to consumers of the negative option feature of their subscription, and dropping a prohibition on sellers telling consumers seeking to cancel their subscription about plan modifications or reasons to keep to their existing agreement without first asking if they want to hear about them.
FTC staff has developed a fact sheet summarizing the changes to the rule.
