The FTC has finalized rules that will make it easier to cancel subscriptions. The rule targets “negative option” programs such as auto-renewing subscriptions. The FTC received more than 16,000 comments during the rule’s public comment process.
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The government has had problems with companies that make it difficult for consumers to cancel their subscriptions.
In a press release Wednesday, the Federal Trade Commission announced final “click-to-cancel” rules that will require companies to make canceling a subscription as easy as signing up.
“Too often, companies make people jump through endless hoops just to cancel their subscriptions,” said FTC Chair Lina Khan. “The FTC’s rules will end these tricks and traps and save Americans time and money. No one should have to pay for services they no longer want.”
The agency said most of the revised rules will become effective 180 days after publication in the Federal Register and apply to “substantially all negative option programs in all media.”
According to the Federal Register, a negative option is when an offer includes terms that allow the seller to interpret the customer’s silence or lack of proactive response as acceptance of the offer (for example, automatic renewal of a subscription) .
The updated rules prohibit companies from misrepresenting or omitting facts when selling negative options, require customers to provide critical information to companies before handing over their credit cards, and require customers to provide critical information to companies before handing over their credit cards and The FTC explained that it will make sure that companies get explicit consent from customers before doing so. .
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The agency stated that the purpose of this rule is to prevent businesses from doing this, including by making the terms of a subscription vague, by being charged even if the customer has not agreed to pay, and by making it difficult or impossible for businesses to cancel a subscription. It said it aims to address common subscription issues.
The FTC says it receives thousands of complaints a year about companies’ subscription practices.
According to the FTC, that number has been on the rise over the past five years. For example, the agency received an average of 42 consumer complaints per day in 2021, according to a press release.
In 2024, the agency received an average of nearly 70 complaints per day.
The FTC took a long time to crack down on fraudulent subscription practices. The agency first released the proposed rule last year, but it had to go through a lengthy public comment process before it was finalized.
The agency said it received more than 16,000 comments from consumers, federal and state government agencies, consumer groups and industry groups during the process.
