FTC passed a Click to Cancel rule requiring businesses to make subscription cancelation easier

The new set of rules will go into effect in 180 days, with some beginning as soon as 60 days after publication in the Federal Register.

Click to Cancel is a new rule from the Federal Trade Commission that aims to make it easier for consumers to cancel their subscriptions. This rule has been in the works since 2019, with the FTC seeking input from the public, industry, as well as law enforcement partners.

The Federal Trade Commission announced on October 16, 2024, that it had passed a new rule that requires businesses to make it as easy to cancel subscriptions and services as it was to sign up for said programs. This new rule has been referred to as “Click to Cancel” and comes with a few guardrails to aid businesses in regulating themselves:

• You can’t require people to talk to a live or virtual representative to cancel if they didn’t have to do that to sign up.
• If you’re offering phone cancellation, you can’t charge extra for that service, and you have to answer the phone or take a message during normal business hours. If you take a message, you have to respond to people promptly.
• If people originally signed up for your program in person, you can offer them the opportunity to cancel in person if they want to, but you can’t require it. Instead, you need to offer a way for people to cancel online or on the phone.

Consumers have long maligned the troublesome ways in which businesses purposefully make it difficult to cancel subscriptions. From hiding cancelation options deep within sub-menus to forcing users to interact with a live chat, unshackling oneself from a product has been far from an easy process. This new rule should help remove these roadblocks.

The Click to Cancel rule is part of a bigger change to the FTC’s Negative Option Rule, which is now known as the Rule Concerning Recurring Subscriptions and Other Negative Option Programs. The goal of the rule is to “protect people from misleading enrollment tactics, billing practices, and cancellation policies,” while giving businesses the information they need to apply these rules.

This new rule is the latest positive movement out of the FTC. Recently, the FTC voted to ban noncompete clauses, which was a major win for workers. Take a look at our Federal Trade Commission page to see what else the regulating body has been up too, like fining GameStop CEO Ryan Cohen almost $1 million.