On May 9, 2025, the FTC announced that it is delaying the compliance deadline for the amended Negative Option Rule (often described as the “Click-to-Cancel Rule”) by 60 days, making the new compliance deadline July 14, 2025. Although there was some doubt whether the new Trump-Vance FTC would allow the rule to take effect given the prior no votes from both Chair Andrew Ferguson and Commissioner Melissa Holyoak (with Holyoak issuing a dissenting statement questioning the legality of the rule) on the final rule itself, the new statement, issued by all three current commissioners, notes that the FTC will begin enforcing the rule (which applies to goods or services that feature a negative-option feature, such as an automatic subscription renewal) following the amended compliance deadline.
The deferred compliance deadline applies to the three provisions of the rule that were not already effective:
- All material terms of the transaction must be disclosed before receiving a consumer’s billing information.
- Consumers must provide express informed consent for the negative-option feature before being charged for any relevant goods or services.
- Cancellation procedures must be as simple as the process for signing up for the goods and services in the first place.
The rule’s ban on misrepresenting any material facts in the selling of relevant goods or services has been effective since January 19, 2025.
In announcing the deferral of the compliance deadline, the FTC stated that the deferral was required to provide ample time for companies affected by the rule to conform to the rule’s new requirements. This announcement should serve as a final reminder for all companies that offer subscription and other automatic renewal products and services to evaluate if their current cancellation practices and enrolling procedures comply with the new rule’s requirements.
Businesses working to ensure compliance with the rule before the new deadline should remember that this rule also applies to contracts with other businesses, not just consumers. The Ferguson FTC is not waiting for the rule to go into effect, as we saw in April’s complaint against Uber that included allegations that Uber had an overly complex cancellation process for its Uber One subscription service. Our Consumer Protection/FTC team is well versed in the rule’s compliance requirements and can assist with any questions you may have.
If you have any questions, or would like additional information, please contact one of the attorneys on our Consumer Protection/FTC team.
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