The FTC's New "Click-to-Cancel" Rule and What It Means for Your Business

The Federal Trade Commission (“FTC”) recently announced its final "click-to-cancel" rule, which will make it easier for consumers to cancel recurring subscriptions and memberships. This change follows the FTC’s ongoing efforts to modernize its regulations surrounding negative option programs, which automatically enroll consumers in services unless they opt-out. As this rule goes into effect in 180 days, it’s important for businesses to understand the new requirements and how they will impact their operations. The rule mandates that businesses must ensure consumers can cancel a service with the same ease as they signed up for it. This means that if your company offers subscriptions, automatic renewals, or similar programs, you must provide a simple and clear cancellation process. No longer will consumers be forced to jump through hoops or engage in complex steps just to stop payments for a service they no longer want. The rule also prohibits businesses from misleading consumers with misrepresentations about material facts such as pricing, the purpose of a service, or the cancellation process.