Sellers Beware: FTC Proposes Changes To Automatic Renewal Laws

Yesterday, the Federal Trade Commission (FTC or Commission) announced a proposed update to its rules governing automatic renewals. If adopted, the revised rules would enhance the FTC's authority to prosecute companies—as well as their owners and officers—in the automatic renewal space. The proposed update would, among other things:

• Institute a new "click to cancel" provision, requiring sellers to make it as easy for consumers to cancel their enrollment as it was to sign up
• Require sellers who receive cancellation requests to obtain express consent before making additional sweetening offers to retain the customer
• Force sellers to provide annual reminders of the automatic renewal of customers' subscriptions for or enrollments in any nonphysical goods