FTC Postpones Click-to-Cancel Rule Enforcement: What It Means for Consumers and Businesses

The Federal Trade Commission (FTC) has decided to postpone enforcing the Negative Option Rule, also known as the “click-to-cancel” rule. This rule aims to make it easier for consumers to cancel their subscriptions, making the process as simple as signing up.

Originally proposed in 2023, the rule targets companies offering subscriptions—like streaming services and gym memberships—that use easy sign-up processes but complicate cancellations. The new regulation mandates that if a customer signs up online, they should also be able to cancel online without facing any additional hurdles. Moreover, companies must inform customers about cancellation policies before asking for payment details.

The FTC announced that while the rule was initially set to take effect on January 19, enforcement of some parts was postponed to May 14. Now, it has been pushed back another 60 days to July 14. The FTC stated that their assessment revealed the challenges businesses might face while trying to comply with the new requirements.

The commission voted unanimously (3-0) for this delay. Currently, there are only three commissioners, after two were fired by former President Trump, leading to ongoing legal disputes concerning their dismissal.

Interestingly, while the enforcement has been delayed, the FTC plans to ensure compliance by the new July deadline. They noted that if challenges arise during enforcement, they are open to revising the rule.

According to recent surveys, many consumers favor such regulations. Research from the Consumer Financial Protection Bureau found that 62% of people believe subscription services should make cancellations straightforward. This growing demand for better business practices reflects changing consumer expectations in the digital age.

In the broader context, similar rules have emerged globally, suggesting a shift towards more consumer-friendly policies. For instance, the European Union has strengthened consumer rights regarding subscription services, indicating a trend toward prioritizing consumer protection across the globe.

In conclusion, while the FTC’s delay is significant, it highlights a crucial movement toward making subscription services more transparent and user-friendly. With ongoing discussions and potential adjustments, both businesses and consumers are watching closely.



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