New Rule Makes Canceling Subscriptions Easier: What the "Click-to-Cancel" Rule Means for Consumers

The U.S. Federal Trade Commission (FTC) has adopted a new rule aimed at making it easier for consumers to cancel subscriptions. The so-called "Click-to-Cancel" rule is designed to simplify the often cumbersome and lengthy process of subscription cancellations. Lina M. Khan, chair of the commission, stated that it is too often the case that companies make it unnecessarily difficult for people to end their subscriptions. The FTC's rule puts an end to this and aims to save Americans time and money by preventing them from continuing to pay for unwanted services. This step is part of the FTC's efforts to modernize the Negative Option Rule, introduced in 1973, and to combat unfair practices in subscriptions and memberships. Complaints about recurring subscription practices have steadily increased over the past five years. In 2024, the FTC reported an average of nearly 70 complaints per day, compared to 42 per day in 2021. The rule could have significant implications for digital retailers like Amazon or online services such as Netflix. Companies will need to obtain consent for subscriptions, automatic renewals, and free trials that convert into paid memberships. Canceling must be as simple as signing up. The FTC has previously criticized Amazon for allegedly enrolling consumers in its Prime subscription service without their explicit consent and making cancellations difficult. Similar practices have been observed at large retailers such as Walmart and Best Buy. Planet Fitness is also in focus, as the company is known for its hard-to-cancel gym memberships.