FTC Approves ‘Click to Cancel’ Rule; What Does It Mean for You?

The Federal Trade Commission (FTC) is finally ready to roll out its new rules on subscription services. The board has announced its new “Click to Cancel” rule that will apply to most subscriptions, including on-demand and live TV streaming services. It’s an advance in consumer protections that’s long overdue, and it closely mirrors regulations enacted by various states in the past few years.

Key Details:

• The “Click to Cancel” rule requires companies to get affirmative consent before enrolling viewers in automatically renewing subscriptions.
• The rule forces subscription providers to offer as easy a way to cancel as it was to sign up for their service.
• California recently took the initiative of crafting its own rules governing subscriptions.

The new FTC regulations will take full effect 180 days after they are published in the Federal Register. The rules were finalized after the FTC received more than 16,000 public comments; in 2024, the commission received almost 70 customer complaints per day about the practices of subscription services.

The new rules state that companies must make it as easy to cancel a subscription as it was to sign up. If a user signed up for a service online, they must be provided with an online method of cancelation. If they signed up in person, they must be given a way to sign up by phone or over the internet.

The “Click to Cancel” rule also says that viewers cannot be signed up for an automatically renewing subscription without first giving their affirmative consent. Customers have to be told specifically what they’re signing up for, and sellers must demonstrate they gave buyers full knowledge of what they were purchasing at the time of a subscription.

The rules apply to almost all “negative option programs” — commercial transactions in which the seller takes a buyer’s lack of affirmative action as consent to be charged for goods or services. Sellers face fines or other potential civil penalties if they fail to abide by the rules.

“Too often, businesses make people jump through endless hoops just to cancel a subscription,” commission chair Lina M. Khan said. “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.”

The new regulations from the FTC closely resemble those recently enacted by the state of California. State officials hailed their new law as “the most comprehensive in the nation” when it was signed in late September, but the federal government wasn’t far behind.

Study after study has shown that viewers waste hundreds of dollars per year on subscriptions they don’t even know they have any longer. Now, viewers will have some relief against predatory practices from companies that enroll them in subscriptions without giving them the full terms upfront.