Click to Cancel: FTC unveils ‘Click to Cancel’ rule to simplify subscription cancellations and protect consumers

For years, companies like Netflix, Adobe, and others have complicated the cancellation process, leaving many consumers stuck in subscriptions they no longer want. Hidden behind a maze of chatbots, customer service agents, and opaque processes, these tactics have caused widespread frustration, often turning what should be a simple task into a drawn-out ordeal.

The US Federal Trade Commission (FTC) is now addressing this with a new “click to cancel” rule aimed at simplifying the process. Announced on Wednesday, the rule requires companies offering subscriptions or membership services to make canceling just as easy as signing up. This rule will take effect in 180 days, forcing businesses to implement a straightforward, one-click cancellation option.

The rule applies to nearly all subscription programs, including business-to-business deals, and prohibits material misrepresentations. Companies must also maintain proof of consent for at least three years. Failure to comply can result in civil penalties. Businesses are encouraged to review their practices to ensure compliance with both FTC regulations and any relevant state laws.

FTC Takes on Subscription Traps with ‘Click to Cancel’ Rule

In a blog post on Wednesday, the agency said it has long overseen negative option practices through the Negative Option Rule and targeted enforcement efforts. Today, the agency is expanding on that foundation by introducing updates to the rule, now called the Rule Concerning Recurring Subscriptions and Other Negative Option Programs.

“The FTC has long regulated negative options through the Negative Option Rule and strategic enforcement actions. Today, the FTC builds on that work by announcing a set of common-sense revisions to the Negative Option Rule, now known as the Rule Concerning Recurring Subscriptions and Other Negative Option Programs,” FTC said.

These revisions aim to protect consumers from deceptive enrollment strategies, confusing billing methods, and hard-to-navigate cancellation processes. At the same time, they provide businesses with clear, straightforward guidelines to foster customer trust and avoid regulatory penalties—all in one place.

“The revisions are designed to protect people from misleading enrollment tactics, billing practices, and cancellation policies, and provide businesses with clear rules of the road, all consolidated in one place, to help them build customer trust and avoid enforcement action,” the agency added.

With the new rule, companies will no longer be allowed to auto-renew subscriptions without explicit customer consent. They must also seek approval before converting free trials into paid plans. Additionally, the rule prohibits businesses from requiring users to go through chatbots or customer agents just to cancel a subscription they signed up for online.