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FTC, Led by Lina Khan, Adopts 'Click-to-Cancel' Rule Updating Negative Option Rule

Oct 16, 2024, 02:57 PM

The Federal Trade Commission (FTC), led by Chair Lina Khan, has adopted a new "Click-to-Cancel" rule that updates the existing Negative Option Rule, requiring businesses to make canceling subscriptions and memberships as straightforward as signing up for them. This rule targets "subscription traps" by mandating that companies provide an easy cancellation process, applicable to retailers, gyms, online subscriptions, and other services, in both B2C and B2B transactions, online and offline. The rule addresses consumer complaints about obstacles imposed when trying to unsubscribe from services and will take effect 180 days after being published. "No American should have to worry about being tricked into buying subscriptions and memberships—or staying in either against their will," said President Joe Biden. The FTC's action is part of the Biden-Harris Administration's efforts to protect consumers and save families time and money. Businesses including major corporations like Amazon ($AMZN) and gyms like Planet Fitness ($PLNT) may be affected by the new requirements.