Subscription Cancellation Law: What the $35 Million Shutterstock FTC Settlement Means for Subscription Businesses
The FTC's announced $35 million Shutterstock settlement concerns renewal disclosures, informed consent, and cancellation barriers. Subscription teams should let customers cancel without unnecessary steps.
On May 13, 2026, the FTC announced that Shutterstock would pay $35 million to settle allegations that it failed to clearly explain repeat charges and cancellation fees, charged customers without their informed agreement, and made cancellation unnecessarily difficult.
The case was brought under the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA), which governs online recurring-charge offers. Shutterstock agreed to the settlement, but a judge still had to approve it.
This article provides general information, not legal advice. Consult your legal or compliance team when applying these lessons. Research reviewed October 2026.
What the FTC alleged
The complaint describes two offer types worth examining in your own program:
On-demand packs: The FTC alleged that packs marketed for a one-time project renewed after the last download, with insufficient disclosure. It also alleged an annual renewal trigger before early 2024.
Annual plans paid monthly: The FTC alleged that enrollment failed to clearly disclose annual renewal and early cancellation fees.
The FTC alleged that, before January 2024, customers could not complete early cancellation of annual, paid monthly plans online. They had to submit a request through the cancellation flow and wait for a follow-up email from Shutterstock, or contact support by phone, email, or chat to begin cancelling.
The complaint’s screenshots show three lessons for retention teams: make recurring charges clear, keep cancellation direct, and disclose exit costs before signup.
Hidden renewal terms and repeat charges
Alleged: Shutterstock marketed packs for a one-time project but charged customers for another pack when they used the last download, without clearly explaining the repeat charge.
Shown: The pack is described as ideal for a one-time project. A small, light-text notice beneath “Buy now” says it will automatically refill when all licenses are used.
Takeaway: Show renewal triggers, charge frequency, and commitments beside the purchase decision. A retention team should never have to explain a recurring charge the customer did not realize they authorized.
A detour on the way to cancellation
Alleged: Shutterstock’s lengthy cancellation process failed ROSCA’s requirement for a simple way to stop recurring charges.
Shown: A prominent editing promotion draws attention away from “Continue to cancel plan.” The red button takes customers out of cancellation.
Takeaway: Keep the cancel action visible and direct. Customers should be able to decline a retention offer and finish cancelling without detours or repeated persuasion.
A cancellation fee revealed near the end
Alleged: Customers often first learned about a substantial cancellation fee when they tried to leave, rather than before signup.
Shown: After six earlier screens, cancelling immediately costs $159.50; the alternative keeps the annual plan running for 11 more months.
Takeaway: Explain the commitment and fee calculation before collecting billing details. At cancellation, clearly show the charge and end date for each option so customers can make an informed choice.
Annual paid monthly needs a clear commitment
Alleged: The FTC said Shutterstock failed to clearly disclose that its annual, paid monthly plan renewed automatically each year and carried an early cancellation fee.
Shown: The price is $29 per month with “Annual, pay monthly” selected. This is a year-long commitment paid in monthly installments. “Cancellation fee applies” appears in light text below “Buy now,” without the fee amount or calculation. The screen does not disclose annual renewal.
Takeaway: Make the annual commitment, renewal, and early cancellation fee clear before purchase. Show the fee amount or calculation beside the plan choice. Paying monthly should not leave customers guessing about a year-long obligation.
Support compliant cancellation with ProsperStack
Make it easy for customers to leave while offering relevant reasons to stay. ProsperStack’s compliance tools help retention teams build a direct cancellation path:
Instant cancel: Give subscribers an immediate cancellation option at the first step, alongside feedback and an optional retention offer.
One-click cancel: Keep a persistent link available so subscribers can cancel immediately from any step in the flow.
Enable these options for all subscribers or use customer segments to apply them to specific groups. Pair them with clear signup disclosures and verify that completed cancellations reach your billing system. Have your legal team review the configured experience against the requirements that apply to your business.
Get a demo to see how ProsperStack can support your cancellation compliance needs.
