What Is the FTC “Click-to-Cancel” Rule?

Signing up for a subscription or membership, such as for a streaming service, software service, or health club, is typically pretty easy. Usually, you just have to go online and click a button. But canceling those automatically renewing subscriptions is often a different story. Customers regularly have to jump through a series of hoops or hidden steps just to end a subscription service.

To address this issue, the Federal Trade Commission (FTC) released a final rule in 2024 called the "click-to-cancel" rule. This rule would have required businesses to allow consumers to cancel a recurring subscription through the same method they used to enroll. Basically, businesses would have had to make canceling a service just as easy as signing up.

However, in July 2025, a U.S. federal appeals court struck down the click-to-cancel rule just days before it was supposed to take effect.

What Was the Federal Click-to-Cancel Rule?

The federal "click-to-cancel" rule was part of the FTC's ongoing efforts to protect consumers from unfair and deceptive practices, particularly when it comes to automatically renewing subscriptions. Under the rule, you would have been able to cancel a subscription using the same method you used to subscribe.

So, under the rule, if you subscribed online, you could cancel online. And the cancellation process should require the same number of clicks to end a subscription as it did for the sign-up process.

Applicability of the Click-to-Cancel Rule

The click-to-cancel rule would have applied to businesses offering "negative option programs," such as streaming platforms and software services.

What Are "Negative Option Programs"?

The FTC's click-to-cancel rule covered "negative option programs." These programs come in various forms, but they all contain a term or condition that allows the seller to interpret a customer's silence, or failure to take an affirmative action, as acceptance of an offer.

In a negative option program, the seller automatically renews a consumer's subscription when it expires unless the consumer affirmatively cancels the subscription. For example, if a credit monitoring service provider automatically renews a monthly credit monitoring service you subscribed to, that's a negative option program. Another example of a negative option program is where a seller automatically begins charging a fee or higher fee after a trial period unless the customer affirmatively cancels the service.

The click-to-cancel rule is also known as the "negative option rule."

Pros and Cons of Negative Option Programs

Negative option programs have pros and cons for consumers. A couple of upsides for consumers are the ability to try new products or services before buying them (such as through a trial plan) and the convenience of uninterrupted products or services (such as with an automatically renewing subscription). One downside for consumers is that they sometimes accidentally consent to enrolling in a negative option program. Consumers can also end up repeatedly paying for a service they don't really want or need because of an overly difficult cancellation process.

For businesses, this setup provides mostly upsides, such as providing greater revenue predictability and an ongoing customer base. The click-to-cancel rule would have thrown a monkey wrench into most companies' negative option business models. Most businesses that rely on subscription models would have needed to make some major adjustments to comply with the click-to-cancel rule.

How Was the Click-to-Cancel Rule Supposed to Work?

The click-to-cancel rule would have applied to any form of negative option program in any media, including internet, telephone, print, and in-person transactions. It included the following provisions:

• Prohibition on misrepresentations. The click-to-cancel rule prohibited misrepresentations of any material fact made while marketing negative option features.
• Clear disclosures. The rule required sellers to provide important information to consumers (including clear and conspicuous disclosure of recurring payments, deadlines to stop charges, costs the consumers might incur, billing dates, and cancellation methods) before getting consumers' billing information and charging them.
• Sellers would have had to get affirmative consent from consumers. The click-to-cancel rule required sellers to get consumers' unambiguously affirmative consent to the negative option feature. The consent would have had to be separate from any other portion of the transaction and happen before the consumer was charged.
• Simple cancellation mechanisms. The rule also required negative option programs to have simple cancellation mechanisms. This requirement was probably the most important feature of the click-to-cancel rule. Many companies design their systems to make it easy to subscribe but hard to cancel, requiring multiple steps, long wait times, or unnecessary interactions with customer service. However, the click-to-cancel rule required sellers to provide consumers with simple cancellation mechanisms to immediately halt all recurring charges. In addition, a business couldn't have required a customer to interact with a live or virtual representative, such as a chatbot, to cancel if the consumer didn't do this when consenting to the subscription. (In other words, the cancellation mechanism would have had to be at least as easy to find and use as the mechanism the consumer used to consent to the negative option feature. That's why the rule is called the "click-to-cancel" rule—canceling a subscription should be just that easy.) (16 C.F.R. § 423.3 through § 425.6 (2025).)

Companies that violate the click-to-cancel rule would have been subject to redress and civil penalties.

Why Was the Click-to-Cancel Rule Introduced?

The click-to-cancel rule was introduced in response to the thousands of complaints the FTC receives each year about negative option programs and recurring subscription practices. Unfair and deceptive negative option practices have been a source of consumer harm and frustration for decades, with consumers getting stuck paying for products and services they never intended to purchase nor wanted to continue paying for.

And, over the past five years, there has been a massive increase in the availability of subscription-based services across industries. Not surprisingly, the number of complaints has also been steadily increasing. In 2024, the FTC received nearly 70 consumer complaints each day on average, up from 42 per day in 2021.

The click-to-cancel rule was a direct response to increased complaints about negative option programs, as well as mounting pressure for consumer protections that address modern options and technologies.

The FTC's Previous Negative Option Rule and Related Laws

For years, the FTC has been addressing deceptive practices in the marketplace. The FTC first promulgated a negative option rule in 1973. But the rule only applied to "prenotification plans" for the sale of goods (basically, where a seller periodically and automatically sends subscribers merchandise unless the subscribers tell them to stop sending the items). (16 C.F.R. § 425.1(c)(1) (2025).) (The rule doesn't address most negative option programs that exist today, like gym memberships and online platforms that allow users to watch or listen to content over the internet, such as movies, TV shows, music, or podcasts.)

In 1998, the FTC extended the rule's application to such plans in all media. In addition, several other statutes and regulations address negative option practices, such as Section 5 of the FTC Act (15 U.S.C. § 45(a)(1) (2025)), which broadly prohibits "unfair or deceptive acts or practices" (though not specifically negative option programs) and the Telemarketing Sales Rule, which prohibits deceptive telemarketing acts or practices, including those involving negative option offers.

However, these laws and regulations don't effectively provide consumers with consistent legal protections covering all the media and negative option offers that are available these days. The click-to-cancel rule was part of the FTC's ongoing efforts to address unfair or deceptive practices related to subscriptions, memberships, and other recurring payment programs.

What Didn't the Click-to-Cancel Rule Cover?

The final version of the click-to-cancel rule didn't include a previously proposed requirement for companies to remind people about recurring charges annually. It also didn't prohibit sellers from presenting additional offers, plan modifications, or reasons to keep a current subscription to a consumer who wants to cancel without first asking the customer if they're interested in hearing about those options.

Will the Federal Click-to-Cancel Rule Go Into Effect?

No. After several industry groups and associations filed lawsuits to block the rule, claiming it imposed onerous regulatory burdens on businesses, the law was overreaching, and it lacked specificity in defining unfair or deceptive practices, a federal appeals court vacated the rule.

The U.S. Court of Appeals for the Eighth Circuit said the FTC's rulemaking process was flawed and struck down the federal click-to-cancel rule as a result.

Some States Have Click-to-Cancel Rules

Learn More About the Negative Option Marketing Practices

To learn more about unlawful negative option marketing practices, review the circular the CFPB issued in January 2023, which discusses the circumstances when negative option marketing might be considered an unfair, deceptive, or abusive act or practice under the Consumer Financial Protection Act.