FTC Click-to-Cancel Rule Set to Go Into Effect May 14, 2025, Delayed 60 Days

POSTED BY Joshua S. Devore and Elena Neigher

In October of 2024, the Federal Trade Commission (FTC) announced its final “Click-to-Cancel” Rule. The Rule appeared set to go into effect on May 14, 2025, although there had been an interim change in administration including a “regulatory freeze” and legal challenges filed to the Rule. The United States Court of Appeal previously denied a preliminary request to stay effectiveness of the Rule, and no argument has yet been set on the merits of the challenge. The FTC has continued to defend the Rule in court and there is no indication at this time that the administration will change course.

However, on May 9, 2025, the FTC announced a sixty-day delay in enforcement. The delay gives businesses additional time to comply with the Rule due to the complexity of compliance but does not suggest that the Rule will be withdrawn. Rather, the FTC’s statement indicates that once enforcement begins after July 14, 2025, the Commission will consider amendments to the Rule if that enforcement effort “exposes problems with the Rule.”

Thus, businesses that offer subscription-based services, memberships, and automatic shipments such as wine clubs still need to be sure they are in compliance with the Rule requiring easy cancellation procedures.

About the FTC “Click to Cancel” Rule

The final rule requires companies to make it as easy as it is for consumers to cancel their enrollment in subscription programs as it was to sign up. This applies to “negative option” marketing, which includes automatic renewals, continuity plans, free-to-pay conversions, and prenotification plans.

Continuity plans allow customers to agree in advance to receive periodic shipments of goods or services, which will continue until they cancel the agreement (for example, pre-set wine club subscriptions).

Note to Businesses Operating in California: This new FTC rule is generally consistent with recent California law on automatic renewal or continuous service offers contained in Business & Professions Code §  17602, so California businesses that are already compliant with the rule – and in particular consumers’ ability to cancel online if they signed up online – will likely not need to make significant changes to their practices.

Any businesses currently using the negative option marketing described above must:

Provide a “simple mechanism” for cancellation: Under the rule, it must be as easy to cancel as it was to sign up. For example, if a customer signed up online, they must be able to also cancel the service online.

There must be a “simple mechanism” for cancellation which must be easy to find – for example, providing a clearly-labeled cancellation button in a consumer’s account or user settings.

In addition, cancellation online cannot require interacting with a live or virtual representative if the original signup did not require such interaction.

For cancellations by phone, requests cannot be unreasonably delayed, whether made via a live phone conversation or through an answering machine. Plus, if original consent to the negative option program was provided in person (such as in person in a tasting room), the consumer must be able to cancel either online or via phone.

Disclose terms at the time of sign up: The rule requires that all material terms of the negative option service be “clearly and conspicuously” disclosed prior to obtaining a consumer’s billing information. The disclosures are required to be provided at the time of sign up. “Material” means “likely to affect a person’s choice of, or conduct regarding, goods or services.” This includes disclosing the recurring nature of the charges, the timing in advance of an upcoming shipment to cancel, the costs (or range of costs) and how to cancel.

Obtain informed consent: The rule requires sellers to obtain express affirmative consent to the negative option program, which must be separate from any other part of the transaction. This means that the consumer must separately agree to a negative option service. In the case of something like an auto renewal, this auto-renewal must be separate from the sale of another offered good or service, through a separately presented check box, signature, or other method signifying the consumer’s consent to the negative option feature itself.

Note that sellers are required to maintain verification of the consumer’s consent for three years from the date of consent. California Note: California’s law requires also providing the consumer with an acknowledgment of the subscription including a copy of the terms, the cancellation policy, and information on how to cancel in a format that the consumer can retain.

Not Misrepresent the Facts: The Click-to-Cancel Rule prohibits sellers from misrepresenting any material fact, including misrepresentations intended to induce consumers to enroll in a negative option program. An example of a misrepresentation about a material fact is when a seller offers a product for free when it is not actually free.

Additional details on the rule:

Timing & Effect on State Laws:

The rule’s provisions related to cancellation and consent take effect on May 14, 2025. The final federal rule has been challenged in court and if plaintiffs are successful, the rule’s implementation may be delayed or entirely blocked. However, at this point it appears set to go into effect.

State laws that provide greater protections to consumers are not considered to be inconsistent with the rule. Thus, California businesses still need to comply with California’s own automatic renewal law.