TINA.org Supports FTC’s ‘Click to Cancel’ Rule against Industry Challenge

These days, you can subscribe to just about anything. But while subscriptions can make our lives more convenient, many of us discover that when we signed up for a subscription, we did so without understanding the terms, or we find that a subscription we no longer want can be very difficult to cancel.

Many subscriptions come in the form of negative-option offers, which is when a seller interprets a consumer’s silence or failure to take an affirmative action to reject a good or service as acceptance of an offer. Such offers, which include things like automatic renewal plans and free trials that later convert to paid plans, have become very popular across a wide range of industries. The problem is that a multitude of negative-option sellers are using deceptive tactics that cost consumers billions of dollars in unwanted recurring charges.

That is why the FTC made changes to its Negative Option Rule to address the most common problems that consumers have with subscription services. In October 2024, the FTC issued its final rule, which updated the original negative option rule that was promulgated in 1973. With a new provision that would require companies to make subscriptions as easy to cancel as they are to sign up for, the rule is now commonly referred to as the “Click to Cancel” Rule.

The final rule defines the following four categories of deceptive behavior to address the all-too-common methods that unscrupulous subscription companies use to manipulate consumers:

• Misrepresenting material facts in marketing a subscription.
• Failing to disclose subscription terms prior to obtaining a consumer’s billing information.
• Failing to obtain a consumer’s express consent to the subscription before charging them.
• Failing to provide a simple mechanism to cancel the subscription.

After the FTC published the final rule, a number of industry groups filed petitions in four different federal courts to undo it, arguing that the FTC had overstepped its authority. The various petitions were then consolidated into one case in the Eighth Circuit Court of Appeals, Custom Communications Inc. v. FTC.

On Friday, TINA.org filed an amicus curiae (“friend of the court”) brief to support the updated Click to Cancel Rule. TINA.org’s brief explained that the rule is needed to curb widespread and harmful abuses of negative-option offers and highlighted the prevalence of this problem across a multitude of industries. Specifically, our organization has investigated more than 100 products and services that are sold through misleading subscription programs, including home internet and mobile services, vitamins and supplements, hunting supplies and outdoor gear, food delivery services, legal services, home cleaning services, printers, skin care products, magazines, movie tickets, perfumes, fitness memberships, clothing, lingerie, celebrity-branded fashion, contact lenses, e-cigarettes, multilevel marketing opportunities, gyms and weight–loss products, among others. Such deceptive autorenewing models are not just used by small, fly-by-night operations, but by large, sophisticated entities as well, including, among others, Amazon, AARP, Unilever and Xfinity.

TINA.org is also tracking more than 175 class-action lawsuits alleging misleading subscription practices by a plethora of companies, including the New York Times, Walmart, Apple, Google, NFL Enterprises, Staples and Zoom.

The large number of people affected by deceptive negative-option plans has been well documented. The FTC has reported that it has received thousands of complaints about unwanted subscriptions – in 2024, the agency received nearly 70 consumer complaints per day on average, up from 42 per day in 2021. A 2024 CNET survey found that “48% of respondents said they had signed up for a free trial of a paid subscription and then forgot to cancel it.” And a 2022 Bankrate survey similarly found that more than half of U.S. adults end up with unwanted charges from a subscription or membership.

TINA.org has catalogued many complaints that illustrate the frustration consumers experience with subscription services:

The individual harms add up to billions of dollars. Victims in just 14 FTC deceptive subscription cases brought between 2008 and 2018 collectively lost $1.3 billion. A 2021 study by Chase Bank found that nearly three-quarters of Americans waste more than $50 a month on unwanted subscription fees. And in a 2022 survey, consumers reported underestimating their actual monthly spend on subscriptions by $133 (or two-and-a-half times more than what they thought they were paying).

Of course, the harm of deceptive negative-option contracts is not limited to consumers — such dishonest practices inflict systemic damage on the American economy. Bad advertising can drive out good: When consumers become suspicious of advertising claims, persuading them that an honest representation is true becomes more costly — a special obstacle for newer competitors. Here, fraudulently successful subscription businesses keep consumers locked in negative-option contracts and direct capital away from honest businesses. Such issues have worsened over time as more and more companies have adopted the subscription model.

If the petitioners challenging the Click to Cancel Rule have their way, the FTC will be prevented from effectively and efficiently regulating deceptive negative-option contracts. So far, the laws in place have not proven to be enough to stop the deluge of unwanted subscriptions across the marketplace. That is why the Click to Cancel Rule is so important – and we hope that the Eighth Circuit will agree.

We will be back with more updates as the case progresses. For now, companies have until May 14, 2025 to comply with certain aspects of the rule (including the “click to cancel” provision). In the meantime, TINA.org will continue to investigate deceptive subscription tactics (just take a look at our hot-off-the-presses Ad Alerts on Rolling Stone, HuntVault, AARP, and Xfinity).