Washington, D.C. — The Federal Trade Commission has opted to postpone the enforcement of its recently proposed Negative Option Rule, commonly referred to as the “click-to-cancel” rule. This regulation aims to simplify the cancellation process for subscription services, ensuring that customers can exit with the same ease as they signed up.
Initially proposed in 2023, the rule addresses customer frustrations regarding subscriptions that are easy to initiate but challenging to terminate. From streaming services to health club memberships, many businesses have developed straightforward sign-up procedures—only to impose complex or tedious cancellation methods that can leave customers feeling trapped.
Under the provisions of the Negative Option Rule, companies will be mandated to allow cancellations through the same method used for initial sign-ups. For example, if a consumer subscribes with just a few clicks online, the cancellation process must be equally straightforward. Additionally, businesses must provide clear information about how to cancel before they request payment details.
The FTC stated that the rule was supposed to take effect on January 19, but the enforcement of certain elements was initially delayed until May 14. Now, the agency has extended the delay for an additional 60 days, pushing the new enforcement date to July 14. This decision comes after a reassessment revealed that the compliance burden on businesses was more complex than initially anticipated.
In a statement, the FTC explained that the adjustment recognizes the intricacies involved in bringing businesses into compliance with the new rule. The commission’s vote to delay enforcement was unanimous, reflecting a commitment to ensuring the rule is practical for implementation.
The current FTC operates with three commissioners due to a controversial shake-up during the Trump administration, which saw the dismissal of two Democratic members. This has led to ongoing legal disputes over the president’s authority to remove commissioners without cause, adding another layer of uncertainty to the agency’s operations.
Despite this delay, the FTC remains firm in its intention to enforce the rule starting July 14, urging businesses to prepare for compliance. The agency emphasized that if enforcement reveals any challenges related to the rule, it is open to making necessary adjustments.
As consumers increasingly demand transparency and fairness in subscription models, the commission’s actions highlight a growing focus on protecting consumers in the digital age. The outcome of this regulatory change could reshape how businesses manage subscriptions, potentially influencing marketplace practices across various industries.