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ARTICLE · 23 OCTOBER 2024

FTC's "Click-to-Cancel" Rule On Subscriptions And Renewals

Polsinelli PC
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On October 16, 2024, the Federal Trade Commission ("FTC") finalized a rule that, once effective, requires businesses to provide their customers with an easy method of cancelling or terminating...

United StatesConsumer Protection
Adam Garcia
Adam Garcia
Reece Clark
Reece Clark

What's Happening?

On October 16, 2024, the Federal Trade Commission ("FTC") finalized a rule that, once effective, requires businesses to provide their customers with an easy method of cancelling or terminating "negative option programs" (or automatic renewal programs).

What is a "Negative Option"?

A "negative option" is a contractual clause generally found in recurring or subscription-based contracts that allows a business to treat a customer's silence or inaction as a continuing acceptance of the original contractual terms agreed to by the customer. Accordingly, negative options allow a business to continuously re-enroll or automatically renew a customer's contract or subscription service (often with variable pricing terms) until the customer actively cancels the subscription or takes other affirmative action to terminate the contract. Some of the most common negative option programs are designed as prenotification plans, continuity plans, automatic

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