Written by: Haim Ravia, and Dotan Hammer
The U.S. Federal Trade Commission (FTC) has announced a new “Click to Cancel” rule, mandating that businesses offer consumers a simple and straightforward way to cancel subscriptions at least as easily as signing up. The rule, primarily targeting “negative option” programs—where subscriptions automatically renew unless actively canceled by the consumer—will mostly come into effect in March 2025, 180 days after its publication in the Federal Register.
The new rule aims to create a unified legal framework that ensures transparency, prevents unauthorized charges, and simplifies subscription cancellation for consumers. Key provisions include banning misleading subscription information, requiring businesses to disclose essential terms before collecting payment details, and obtaining clear consent before charging consumers. Additionally, businesses must provide a cancellation process as accessible as their subscription process—for instance, allowing online cancellations if sign-ups occur online. Violators could face fines and consumer compensation.
The FTC highlighted the growing need for such measures, citing an average of 70 daily consumer complaints about deceptive subscription practices in 2024, compared to the 42 daily complaints it received in 2021.
Click here to read the FTC’s announcement.
Click here to read the Negative Option Rule published in the Federal Register.
