FTC Releases "Click To Cancel" Rule

On October 16, the Federal Trade Commission (FTC) released the final version of its Rule Concerning Recurring Subscriptions and Other Negative Option Programs (Rule), which requires sellers of products and services to receive informed consent before locking consumers into an automatically renewing contract, among other transparency and easy cancel requirements.

The Rule, also called the "Click-to-Cancel" rule, governs both business-to-consumer and business-to-business transactions, and the Rule applies to any person or entity that sells, offers, or provides goods or services with a "negative option feature." Negative option features are contract terms under which a consumer's silence or failure to take an affirmative action is interpreted as acceptance or continuing acceptance of the offer. The Rule targets contract provisions that establish an automatic renewal, a continuity plan, or a free-to-pay or reduced fee-to-pay conversion (such as a free-trial period that