FTC proposed provision to easily cancel recurring subscriptions and memberships.
Follows FTC 2019 notice of proposal to amend its negative options rule, see #65498.
Click to Cancel Provisions
FTC proposed click to cancel provisions to protect consumers from difficult to cancel memberships, and businesses will face penalties who trick consumers into signing up.
Amend 16 CFR 425negative option rule for consumers who wish to opt out of subscriptions, or to cancel subscriptions/memberships that they wish to discontinue.
The proposal will also implement simple cancellation mechanism, new requirements for additional offers, and new requirements for reminders and confirmations.
Consultation
Comments on proposal are due 60 days after publication of notice in federal register.
Apr. 2023 Fed Reg Filing
On Apr. 24, 2023, FTC published proposal in federal register, comment Jun. 23, 2023.
Jun. 2023 CAL AG Coalition Comments
On Jun. 26, 2023, CAL AG Rob Bonta announced that, as a member of the twenty-six State coalition, he had filed a comment letter regarding the FTC proposed rule.
Supports proposal to easily cancel recurring subscriptions and memberships, but made suggestions on consent, cost-effectiveness, simpler cancellations, more methods.
Jun. 2023 NC AG Coalition Comments
On Jun. 28, 2023, NC AG Josh Stein announced his support, joined AG comment letter for the FTC's proposed changes to its negative option rule to better protect consumers.
Dec. 4, 2023 FTC Virtual Hearing
On Dec. 4, 2023, FTC reported informal hearing on Jan. 16, 2024, to review proposal.
Six nongovernmental organizations will speak and address the issues raised to date.
Dec. 8, 2023 FTC Federal Register
On Dec. 8, 2023, FTC publishedNotice of informal hearing, to be held Jan. 16, 2024.
Notice of hearing followed requests by commenters to make oral submission at an informal hearing for FTC to consider several potential disputed issues of material fact.
Jan. 2024 FTC Hearing Notice
On Jan. 10, 2024, FTC issued notice on issues raised ahead of click-to-cancel hearing.
FTC received requests for extensions, to reconsider its determination of no genuinely disputed issues of material fact to be resolved at the hearing; FTC denied the requests.
Oct. 2024 FTC Final Rule
On Oct. 16, 2024, FTC issued finalclick-to-cancel rule that require sellers to make it as easy for consumers to cancel enrollment; also published fact sheet on changes to rule.
Adopted final rule with certain changes, most notably dropping requirement sellers provide annual reminders to consumers of negative option feature of subscription.
Dropped prohibition on sellers telling consumers seeking cancel subscription on plan modifications, reasons keep to existing agreement without ask if want to hear them.
Most final rule provisions go into effect 180 days after publication in federal register.
In Oct. 2024, PEN AG reported FTC amended the click to cancel rule, see #230305.
Nov. 2024 FTC Fed Reg Final Rule
On Nov. 15, 2024, FTC issued final rule, in federalregister, effective Jan. 14, 2025.
Regulated entities have until May 14, 2025, to comply with Sec. 425.4 through 425.6.
