The Federal Trade Commission's “click to cancel” rule protects consumers from unfair and deceptive recurring billing practices in almost all media, including internet, telephone, print and in-person transactions like gym memberships. 

The rule requires that businesses make canceling a subscription as easy as it is to sign up, and allow cancellation in the “same medium” used to sign up.

Read on for a breakdown of the rule’s provisions and our compliance checklist for subscription-based businesses.

Disclaimer: The guidance provided herein is for informational and educational purposes only and does not constitute legal advice. Please consult a legal/compliance representative when implementing subscription compliance policies and practices.

“Click to cancel” at a glance

The FTC’s recent rule aims to update, consolidate and clarify the existing patchwork of consumer-protection regulations that oversee subscription billing, including the Restore Online Shoppers’ Confidence Act.

It’s a nationwide analogue to many state-level statutes, such as California’s click to cancel law.

Scope

The 2024 rule provides consistency across media. Requirements apply to all subscriptions, free trials, etc in all media, including internet, mobile application, text/SMS, email, telephone, print and in-person.

Businesses that were previously excluded from similar requirements, like those outlined in the FTC’s 2021 enforcement policy, are subject to the final rule. Additionally, in-person signups are now addressed: for customers who signed up in-person, business must allow cancellation online or via phone.

Key provisions

The click to cancel rule’s provisions are similar to those in effect since 2021. In summary, the regulation requires:

• Disclosures - Businesses must provide important disclosures prior to obtaining consumers’ billing information.

• Consent - Businesses must obtain consumers’ unambiguous and affirmative consent to the subscription.

• Easy cancellation - Businesses must provide consumers with simple cancellation mechanisms that immediately stop all recurring charges.

Additionally, businesses are prohibited from misrepresenting any “material fact” while offering subscriptions, free trials or other “negative option features.”

Provisions will take effect 60-180 days after entering the Federal Register.

Subscription signup

The FTC rule mandates that businesses, when enrolling consumers in subscription billing (in any media, including online, via telephone or in person) follow guidelines to ensure consumers are adequately informed of all terms before purchase and are not enrolled without their explicit consent.

Disclosures

Prior to obtaining the customer’s billing information for the purposes of a subscription, a business must clearly and conspicuously disclose all “material terms,” meaning those terms likely to affect the consumer’s buying decision, whether directly related to the subscription or not.

These terms include, but aren’t limited to:

• That the customer will be charged unless they take action to cancel

• The amount that will be billed and the frequency of recurring charges

• The date by which they must cancel to avoid being billed

• All information necessary to locate the cancellation mechanism

These disclosures must appear “immediately adjacent” to the means of recording the consumer’s consent to the subscription and must stand out from accompanying text or other visual elements so that they are easily noticed, readable and understandable by the average consumer.

Example of offer terms when starting a Spotify Premium trial subscription

For a written offers (including online or by phone), the rule states that businesses will be deemed in compliance if consent is obtained via a checkbox, signature or other “substantially similar method,” which the consumer actively selects or signs to accept the subscription, separately from other aspects of the transaction. The consent request must be presented in a “clear, unambiguous, non-deceptive” manner and free of any information not directly related to consent of the subscription or free trial.

Additionally, the rule specifies that “[a]ll communications, regardless of media, must not contain any other information that interferes with, detracts from, contradicts, or otherwise undermines the ability of consumers to read, hear, see, or otherwise understand the disclosures.”

Consent 

The rule requires that a business obtain “express informed consent” to automatic renewal agreements before charging the consumer.

Businesses must:

• Obtain “unambiguously affirmative consent” of the subscription separately from other aspects of the transaction

• Not include information that “interferes with, detracts from, contradicts or otherwise undermines” the consumer’s ability to provide consent

• Maintain a record of the consumer’s consent for at least three years, or demonstrate by a “preponderance of evidence” that its processes absolutely prevent transactions without consent

Misrepresentations

Businesses must take care not to misrepresent, expressly or by implication, any “material fact,” meaning those likely to affect the consumer’s buying decision, including:

• The automatic renewal or free trial terms, including consent, any deadlines to prevent further charges, or how to cancel

• Cost

• “Purpose or efficacy of the underlying good or service, health or safety, or any other “material” fact

Subscription cancellation

A key requirement of the FTC’s final rule is simple cancellation, ie. “click to cancel.”

Sellers must provide a “simple mechanism” for the consumer to cancel the subscription and immediately stop recurring charges (or an initial charge after a free trial). This cancellation mechanism must be “at least as easy” as the mechanism used to consent to the subscription. At minimum, the business must allow for cancellation in the “same medium” used to sign up, effectively ending call-to-cancel policies for online businesses.

For online cancellation, the simple cancellation mechanism must be easy to find. Interacting with a live or virtual representative is not allowed if such an interaction wasn’t required to consent to the subscription.

For cancellation via phone, businesses must make available a number to answer or record messages during normal business hours, and must promptly process all cancellations received. The call must not be “more costly” than the call used to consent to the subscription.

If consent was obtained in-person, businesses should offer (where practical) an option to cancel in-person, and must offer a simple cancellation mechanism online or via telephone.

7 Cancellation Flow Examples to Reduce Churn and Grow Your Subscription Business

Compliance checklist

Use this checklist to help you comply with the new click to cancel rule.

Consent to negative option

• ☐ Separate consent - Obtain “unambiguously affirmative consent” to the negative option separately from other elements of the agreement.

• ☐ Paper trail - Maintain a record of consent for at least three years, or demonstrate that transactions cannot happen without consent.

• ☐ Transparency - Avoid including any information that could interfere with the consumer’s ability to provide informed consent.

Negative option disclosures

• ☐ Clear and conspicuous disclosures - Prior to obtaining billing information, clearly and conspicuously disclose all “material terms,” including that the customer will be billed unless they take action, the amount to be billed, the frequency of charges, the deadline to cancel to avoid charges, and how to find cancellation options.

• ☐ Easily noticed - Disclosures must be “immediately adjacent” to the consent form, must stand out from other elements, and be readable and understandable by the average consumer.

• ☐ Misrepresentations - Avoid misrepresenting any “material fact,” meaning those likely to affect the consumer’s buying decision.

Simple cancellation

• ☐ Parity with consent - Provide a “simple mechanism” for cancellation which is at least as easy as consent.

• ☐ Immediacy - When a cancellation request is submitted, immediately stop all charges.

Medium of cancellation

• ☐ Same medium - Provide a cancellation mechanism in the “same medium” as consent.

Online cancellation

• ☐ Easy to find - The simple cancellation method must be easy to find.

• ☐ Representatives - Do not require interaction with a live or virtual rep (e.g. chat bot) if no such interaction was required to consent.

Phone cancellation

• ☐ Simplicity - Answer or record messages during normal business hours, and ensure calls are no more “costly” than consent.

• ☐ Promptness - Process cancellations promptly.

In-person cancellation

• ☐ In-person option - For consent obtained in-person, an in-person cancellation option should be provided (where practical).

• ☐ Alternatives - In addition, provide a simple cancellation mechanism online or via telephone.

Get compliant today with ProsperStack

With the FTC’s click to cancel rule coming into effect, providing a simple cancellation process is not just a best practice—it’s the law. ProsperStack helps you stay compliant while optimizing retention.

Trusted by brands like Nutrafol, Nestle and Hootsuite, ProsperStack Retain is churn-busting cancellation flow software with robust reporting, A/B testing and AI offer optimization. And because we integrate with your subscription billing platform, you can be up and running with just a few lines of code.

Setup is simple:

• Connect your subscription platform — Connect Stripe, Chargebee, Recurly, Paddle and more to fully automate subscription cancellation, pauses, trial extensions, coupons and more.

• Embed into your site — Seamlessly integrate your new cancellation flow directly into your product with minimal development. Start with our cancellation template based on best practices and customize to your needs by mixing and matching reusable components.

• Learn from churn — Collect actionable data from customers who cancel. Make changes at any time with just a few clicks.

• Reduce churn with alternatives to cancellation — Automatically present coupons and other incentives to retain customers based on their answers and segments. Optimize with powerful A/B testing, AI Autopilot, customer segmentation and robust reporting.

• Analyze and win back — Use the insights you've gathered to improve your product and re-engage churned customers.

Upgrade your cancel button today and start retaining more of your most valuable customers.