Click-to-cancel: Difference between revisions

 

The '''click-to-cancel''' (CtC) rule is a [[Federal Trade Commission]] (FTC) rule, specifically [https://www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-425/section-425.6 16 CFR Part 425.6], which requires that subscription services make it as easy to cancel the service as it was to sign up.<ref>{{Cite web |date=16 Oct 2024 |title=Federal Trade Commission Announces Final “Click-to-Cancel” Rule Making It Easier for Consumers to End Recurring Subscriptions and Memberships |url=https://www.ftc.gov/news-events/news/press-releases/2024/10/federal-trade-commission-announces-final-click-cancel-rule-making-it-easier-consumers-end-recurring |website=Federal Trade Commission |url-status=live |archive-url=http://web.archive.org/web/20260206202338/https://www.ftc.gov/news-events/news/press-releases/2024/10/federal-trade-commission-announces-final-click-cancel-rule-making-it-easier-consumers-end-recurring |archive-date=6 Feb 2026}}</ref> This is designed to combat an anti-consumer practice, where a subscription service makes it very easy to sign up for a service, but requires the customer to jump through hoops to cancel the subscription. The law has been finalized and was initially set to go into effect May 14, 2025.<ref>{{Cite web |date=15 Nov 2024 |title=Federal Trade Commission,16 CFR Part 425, RIN 3084-AB60 |url=https://www.federalregister.gov/documents/2024/11/15/2024-25534/negative-option-rule#p-6 |website=Federal Register |url-status=live |archive-url=http://web.archive.org/web/20250515052212/https://www.federalregister.gov/documents/2024/11/15/2024-25534/negative-option-rule |archive-date=15 May 2025}}</ref> On July 8, the U.S. Court of Appeals for the Eighth Circuit blocked the click-to-cancel provision, reasoning that the FTC erred by not first conducting a preliminary regulatory analysis of the rule's costs and benefits. The analysis must be conducted on any rules that impact the economy by more than $100 million. The FTC can still petition the Supreme Court to review the decision through October 6, 2025 <ref>{{Cite web |last=Fouse-Hopkins |first=Lindsay |date=2025-07-17 |title=Eighth Circuit blocks Click-to-Cancel Rule |url=https://www.clarkhill.com/news-events/news/eighth-circuit-blocks-click-to-cancel-rule/ |url-status=live |access-date=2025-07-17 |website=Clarkhill.com |archive-url=http://web.archive.org/web/20251207032751/https://www.clarkhill.com/news-events/news/eighth-circuit-blocks-click-to-cancel-rule/ |archive-date=7 Dec 2025}}</ref>  

The rule prohibits the following:<ref>{{Cite web |date=2024 |title=The FTC’s “Click to Cancel” Rule |url=https://www.ftc.gov/system/files/ftc_gov/pdf/NegOptions-1page-Oct2024-v2.pdf |website=Federal Trade Commission |url-status=live |archive-url=http://web.archive.org/web/20251122050657/https://www.ftc.gov/system/files/ftc_gov/pdf/NegOptions-1page-Oct2024-v2.pdf |archive-date=22 Nov 2025}}</ref><ref name=":0">https://www.govinfo.gov/content/pkg/FR-2024-11-15/pdf/2024-25534.pdf ([http://web.archive.org/web/20251124053133/https://www.govinfo.gov/content/pkg/FR-2024-11-15/pdf/2024-25534.pdf Archived])</ref>

A "negative-option feature" is defined by the FTC as "a provision in an offer or agreement to sell or provide any goods or services 'under which the customer’s silence or failure to take an affirmative action to reject goods or services or to cancel the agreement is interpreted by the seller as acceptance of the offer'".<ref name=":0" /> In other words, it is a feature of a service, where once a subscription is initiated, the customer will continue to be billed until they actively cancel the subscription.

The click-to-cancel rule is not limited to electronic services, as the name might suggest. It includes, but is not limited to "Interactive Electronic Media, telephone, print, and in-person transactions."<ref>https://www.federalregister.gov/documents/2024/11/15/2024-25534/negative-option-rule#sectno-citation-425.1 ([http://web.archive.org/web/20250515052212/https://www.federalregister.gov/documents/2024/11/15/2024-25534/negative-option-rule Archived])</ref> The cancellation mechanism must be "at least as simple as consent".<ref>https://www.federalregister.gov/d/2024-25534/p-1164 ([https://web.archive.org/web/20260223034631/https://unblock.federalregister.gov/ Archived])</ref> The customer may not be required to interact with a representative, whether a real human or a chat bot, if the customer was not required to do so when they signed up for the service.<ref>https://www.federalregister.gov/d/2024-25534/p-1166 ([https://web.archive.org/web/20260223034652/https://unblock.federalregister.gov/ Archived])</ref> For services which were signed up for in-person, the seller must allow cancellation online or over the phone.<ref>https://www.federalregister.gov/d/2024-25534/p-1168 ([https://web.archive.org/web/20260223034713/https://unblock.federalregister.gov/ Archived])</ref>  

Gym memberships are a notorious example of being significantly more difficult to cancel than they were to sign up for. While some states, such as California<ref>{{Cite web |date=2024 |title=AB-2863 Automatic renewal and continuous service offers |url=https://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml?bill_id=202320240AB2863&showamends=false |website=California Legislative Information |url-status=live |archive-url=http://web.archive.org/web/20260128152243/https://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml?bill_id=202320240AB2863&showamends=false |archive-date=28 Jan 2026}}</ref> already had laws analogous to CtC, gym locations outside of those locations have continued to make it easy to sign up, yet difficult to cancel.

Prior to state-level laws, Planet Fitness's FAQ stated that "You can fill out a cancellation form at the front desk of your home club, or send a letter (preferably via certified mail) to your club requesting cancellation. Memberships can’t, unfortunately, be cancelled by email or phone"<ref>{{Cite web |title=Frequently Asked Questions |url=https://www.planetfitness.com/about-planet-fitness/customer-service#region-faq-accordion-0 |website=Planet Fitness |url-status=live |archive-url=http://web.archive.org/web/20260101164213/https://www.planetfitness.com/about-planet-fitness/customer-service |archive-date=1 Jan 2026}}</ref>{{UpdateNeeded|date=October 2025|reason=The FAQ has changed since the initial writing of this article version.}} despite allowing online signups. As of Jan 18, 2025, its terms state "our cancellation process may vary from club to club", and that "Some members may also be eligible to cancel their membership online based on their membership type and the location of their home club."<ref>https://www.planetfitness.com/about-planet-fitness/customer-service#region-faq-accordion-0 ([https://web.archive.org/web/20260405060509/https://www.planetfitness.com/about-planet-fitness/customer-service#region-faq-accordion-0 Archived])</ref>

In a similar vein, LA Fitness's current policy states that "via your online account or as may otherwise be provided in your agreement (for example, depending on your state of enrollment, you may be able to cancel by email)", but previously stated that they "recommend you mail the notice by certified mail and keep a record for your files. Or, you can deliver the notice directly to the Operations Manager at the nearest LA Fitness facility between 9AM and 5PM on Monday through Friday."<ref>https://web.archive.org/web/20210616083544/https://lafitness.com/Pages/MembershipQuestions.aspx#</ref>{{UpdateNeeded|date=October 2025|reason=FAQ wording has since changed}}

"Free-to-pay" is a technical term for free trials with a negative-option feature.<ref>https://www.ftc.gov/system/files/documents/public_statements/1598063/negative_option_policy_statement-10-22-2021-tobureau.pdf ([http://web.archive.org/web/20251209002749/https://www.ftc.gov/system/files/documents/public_statements/1598063/negative_option_policy_statement-10-22-2021-tobureau.pdf Archived])</ref> In many cases, rather than providing a free trial with no strings attached, and only billing the customer if they decide to sign up, the vendor collects payment information as a prerequisite of the free trial, and automatically bills the customer if they fail to affirmatively cancel the trial (a negative-option feature).

While it does not outright prohibit this practice, the click-to-cancel rule partially alleviates these issues by requiring clear disclosures and consent. According to state AGs, "advertisements for free-to-pay conversion offers often lure consumers by promising a 'free' benefit while failing to clearly and conspicuously disclose future payment obligations".<ref>https://www.federalregister.gov/d/2023-07035/p-83 ([https://web.archive.org/web/20260223034831/https://unblock.federalregister.gov/ Archived])</ref> The FTC also states that:<ref>https://www.federalregister.gov/d/2023-07035/p-87 ([https://web.archive.org/web/20260216014934/https://unblock.federalregister.gov/ Archived])</ref><blockquote>Other studies reveal similar trends. TINA noted the FBI's internet Crime Complaint Center recorded a rise in complaints about free trial offers, growing from 1,738 in 2015 to 2,486 in 2017, with losses totaling more than $15 million. Similarly, a 2019 Bankrate.com survey cited by NCL found that 59% of consumers have signed up for “free trials” that automatically converted into a recurring payment obligation “against their will.” In NCL's view, these data point to “a troubling, and costly problem for American consumers.” </blockquote>

[[Adobe]] allegedly "trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles", according to a 2024 report by the FTC.<ref>https://www.ftc.gov/news-events/news/press-releases/2024/06/ftc-takes-action-against-adobe-executives-hiding-fees-preventing-consumers-easily-cancelling ([http://web.archive.org/web/20260102191015/https://www.ftc.gov/news-events/news/press-releases/2024/06/ftc-takes-action-against-adobe-executives-hiding-fees-preventing-consumers-easily-cancelling Archived])</ref> Some of their plans are confusing "annual paid monthly" plans, in which the customer receives a discount as if they had signed up for an annual subscription, but are billed monthly. The FTC alleges that they did not prominently disclose the early termination fee associated with these plans, which is half of the remaining monthly payments if the consumer cancels before the annual subscription runs its course. The complaint also alleges that the cancellation process is difficult and costly:<blockquote>In addition to failing to disclose the ETF [early termination fee] to consumers when they subscribe, the complaint also alleges that Adobe uses the ETF to ambush consumers to deter them from cancelling their subscriptions. The complaint also alleges that Adobe’s cancellation processes are designed to make cancellation difficult for consumers. When consumers have attempted to cancel their subscription on the company’s website, they have been forced to navigate numerous pages in order to cancel. When consumers reach out to Adobe’s customer service to cancel, they encounter resistance and delay from Adobe representatives. Consumers also experience other obstacles, such as dropped calls and chats, and multiple transfers. Some consumers who thought they had successfully cancelled their subscription reported that the company continued to charge them until discovering the charges on their credit card statements.</blockquote>

Brigit is a cash-advance app. The FTC complaint alleges that the company "used manipulative design tricks to create a confusing and misleading cancellation process that made it difficult for consumers to cancel their subscriptions."<ref>https://www.ftc.gov/news-events/news/press-releases/2024/11/ftc-sends-more-17-million-consumers-harmed-brigits-deceptive-claims-junk-fees-confusing-cancellation ([http://web.archive.org/web/20251218135141/https://www.ftc.gov/news-events/news/press-releases/2024/11/ftc-sends-more-17-million-consumers-harmed-brigits-deceptive-claims-junk-fees-confusing-cancellation Archived])</ref>