FTC Announces New ‘Click to Cancel’ Provision for Subscriptions

Why should canceling a subscription be any harder than signing up for one?

According to the FTC, it shouldn’t be. TINA.org happens to agree, which, among other reasons, was why we filed a comment with the FTC last year noting (and providing examples of) how difficult some companies make it to cancel recurring subscriptions after they’ve obtained consumers’ billing information.

Our June 2023 comment came in response to updates the FTC was proposing to its 50-year-old Negative Option Rule, which the agency uses to combat unfair or deceptive practices related to subscriptions, memberships and other recurring-payment programs.

Today, the FTC announced it has adopted several of the proposed changes, including a “click to cancel” provision that the FTC says will make it easier for consumers to put a stop to recurring subscriptions and memberships. For example, if consumers signed up online, the rule now requires companies to allow them to cancel online as well, without encountering any unnecessary hurdles.

“Too often, businesses make people jump through endless hoops just to cancel a subscription,” Commission Chair Lina Khan said in a statement. “The FTC’s rule will end these tricks and traps, saving Americans time and money. Nobody should be stuck paying for a service they no longer want.”

By a 3-2 vote, commissioners approved an amended rule that also now prohibits sellers from misrepresenting subscriptions, as well as the underlying products or services.

The final rule does not require that sellers provide consumers annual reminders regarding subscriptions before they are automatically renewed, which was something the FTC was seeking to add to the rule but ultimately dropped.

Go deeper

TINA.org’s 2023 comment came after Pennsylvania Attorney General Michelle Henry announced a $2.35 million multistate settlement with Adore Me – which was the subject of an in-depth TINA.org investigation, as well as complaints to state and federal regulators – resolving claims that the online lingerie retailer deceptively marketed its VIP Membership Program and made it difficult for members to cancel. Years before this multistate action, the FTC reached a $1.4 million settlement with Adore Me (following TINA.org’s complaint to the agency).

In 2022, TINA.org filed a complaint with the FTC regarding meal kit company HelloFresh’s deceptive autorenewal program, which many consumers report having difficulty canceling. Though the FTC has yet to take action against HelloFresh, consumers continue to report suffering harm as a result of the company’s deceptive tactics. Here’s a sampling of consumer reviews from just the last month:

The FTC’s rule additions are welcome ones, and TINA.org is anxious to see them applied in short order. Stay tuned for updates.

Find more of our coverage on subscriptions here.