FTC delays easy click-to-cancel, hints the rule may be weakened
The jumping through hoops and loops to cancel unwanted subscriptions should end on July 14th, 2025. The Federal Trade Commission gives companies two additional months to comply with the click-to-cancel rule.
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The jumping through hoops and loops to cancel unwanted subscriptions should end on July 14th, 2025. The Federal Trade Commission (FTC) gives companies two additional months to comply with the click-to-cancel rule.
In October last year, the FTC revised a Negative Option Rule, also known as a “click-to-cancel” requirement. The updated rule requires companies to provide an easy way to cancel, no harder than it was to sign up for the services.
The rule went into effect on January 19th. However, the FTC under the previous Administration deferred enforcement of some provisions until May 14th, 2025.
The FTC has now announced that it has again delayed the compliance deadline to July 14th to “ensure ample time for companies to conform their conduct to the Rule.”
The watchdog said it assessed the burdens imposed by the rule and determined that the previous deadline was insufficient to account for the complexity of compliance.
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The Negative Option Rule prohibits companies from making it any more difficult for consumers to cancel than it was to sign up.
“As an example, companies will not be able to force consumers to interact with live or virtual customer service representatives—whether in person, on the phone, through instant messaging, or by any other means—unless that is how the consumer signed up in the first place,” the FTC explains.
The amendments to the rule also require companies to clearly and conspicuously disclose all material terms of the transaction and obtain express informed consent to a negative-option feature before selling subscriptions.
The negative option is a practice of interpreting a customer’s silence or inaction as consent, which often leads to charges.
While beneficial to consumers, several lawsuits from big companies and trade associations, including the Electronic Security Association, Interactive Advertising Bureau, NCTA—The Internet and Television Association, and the Chamber of Commerce for the United States, have challenged the rule in courts. Companies dispute attempts to regulate consumer contracts.
The current FTC’s statement suggests that the rule may be weakened.
If the “enforcement experience exposes problems with the Rule, the Commission is open to amending the Rule to address any such problems,” the document reads.
The click-to-cancel rule threatens some business models that rely on holding consumers hostage. The FTC has previously found that many gym, fitness center, and health studio memberships are sold via negative options and require cancellation via certified mail or in person.