The Federal Trade Commission (FTC) has announced the finalization of its “click-to-cancel” rule, which mandates that businesses make it as easy for consumers to cancel subscriptions as it is to enroll in them.
This decision follows the receipt of over 16,000 public comments and aims to enhance consumer protections related to negative option marketing practices. Most provisions of the rule will take effect 180 days after its publication in the Federal Register.
“Too often, businesses make people jump through endless hoops just to cancel a subscription. 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,” FTC Chair Lina M. Khan stated.
The updated regulation will apply to a wide range of negative option programs across various media. It will prohibit companies from misrepresenting key facts when utilizing negative option marketing, require the disclosure of important information before obtaining consumers’ billing details, and mandate that sellers secure informed consent from customers regarding negative option features before processing charges.
This rule is part of the FTC’s broader effort to modernize its 1973 Negative Option Rule to address unfair or deceptive practices associated with subscriptions and recurring payments in a digital marketplace. Complaints related to negative option marketing have surged in recent years, with the FTC averaging nearly 70 consumer complaints per day in 2024, compared to 42 per day in 2021.
Key provisions of the final rule will prohibit sellers from:
- Misrepresenting material facts in their marketing of goods or services with negative option features.
- Failing to provide clear disclosures of essential terms before collecting a consumer’s billing information.
- Charging consumers without their express informed consent regarding negative option features.
- Lacking a simple mechanism for consumers to cancel and halt immediate charges.
The final rule has undergone revisions based on public feedback, including the removal of a requirement for annual reminders about subscription terms and adjustments to how cancellation information is communicated to consumers.
The Commission approved the publication of the final rule with a 3-2 vote, with dissenting opinions expressed by Commissioners Melissa Holyoak and Andrew N. Ferguson.
