FTC Rules: Subscription Cancellations Must Be Simple

It’s all too common for people to keep subscriptions they don’t want, simply because canceling is difficult. The Federal Trade Commission (FTC) is taking steps to change this, implementing new rules to make subscription cancellations straightforward and hassle-free.

FTC’s “Click to Cancel” Rule for Subscriptions

The FTC has updated its Negative Option Rule, now known as the Rule Concerning Recurring Subscriptions and Other Negative Option Programs. This new regulation means companies must make it easy for customers to opt-out of recurring subscriptions without unnecessary barriers.

According to the FTC, negative option programs can include:

• Prenotification plans
• Continuity plans
• Automatic renewals
• Free trials

While some negative option plans are legitimate, the FTC has found that many companies use complicated processes to retain customers against their wishes.

Clear and Accessible Subscription Cancellation

Under the new rules, businesses must ensure:

• Easy cancellation: If someone subscribed online, they should be able to cancel online.
• No unnecessary interactions: If the sign-up didn’t require speaking with a representative, cancellations shouldn’t either.
• No fees for phone cancellations: Canceling by phone must be free, and in-person cancellations should be optional.
• Consumer consent and disclosure: Companies must obtain informed consent for charges and keep records for at least three years. Full terms, including cancellation details, must be disclosed with every subscription offer.

Why Compliance Matters for Businesses

Starting April 2025, companies that don’t follow these rules may face substantial fines—up to $51,744 per customer, per violation. For small and mid-sized businesses, non-compliance could have serious financial consequences.

For businesses in Southern Arizona, this is a good time to review subscription practices and ensure compliance. If you need any IT support along the way, InTegriLogic is here to help. Contact us at 520-545-0691 with any questions.