Unsubscribing remains a headache: court strikes down “click-to-cancel” rule

The US Court of Appeals for the Eighth Circuit has struck down the Federal Trade Commission’s “click-to-cancel” rule, which would have freed consumers from the so-called subscription trap.

The torturous experience we all have when attempting to cancel various subscriptions should have ended on July 14th.

That’s when the FTC’s updated Negative Option Rule, also known as a “click-to-cancel” requirement, demanding that companies provide an easy way to cancel memberships, should have fully entered force.

But now, just days before the rule was scheduled to take effect, it was vacated by the court. The latter found that the FTC failed to follow required procedures under the FTC Act during the rule-making process.

“While we certainly do not endorse the use of unfair and deceptive practices in negative option marketing, the procedural deficiencies of the Commission’s rulemaking process are fatal here,” the court wrote.

Several lawsuits from big companies and trade associations, including the Electronic Security Association, Interactive Advertising Bureau, the Internet and Television Association, and the Chamber of Commerce for the United States, have challenged the rule in courts, disputing attempts to regulate consumer contracts.

The rule would have covered all forms of negative option marketing, which allows sellers to interpret customer inaction as acceptance of subscriptions. This often leads to unintended payments.

With the “click-to-cancel” initiative having been voided at the eleventh hour, the plan seems dead in the water.

Businesses would also have been prohibited from forcing users into lengthy chat sessions with human agents or creating other barriers to canceling an unwanted subscription.

Back in October, the FTC – still working under President Joe Biden’s administration – said it was jumping into action after receiving more than 16,000 complaints from the public. In 2024 alone, the agency received nearly 70 complaints per day.

With the “click-to-cancel” initiative having been voided at the eleventh hour, the plan seems dead in the water. This means that businesses using negative option marketing will continue to face no legal consequences.