Court Inhibits FCC Decision Easing Subscription Cancellation Process
The Federal Trade Commission's (FTC) rule aimed at making it easier for consumers to cancel subscriptions, known as the "click-to-cancel" rule, was recently struck down by a US federal appeals court. The rule, which was set to take effect on July 14, 2025, would have required companies to allow consumers to cancel subscriptions as easily as they signed up, without the need for phone calls, chatbots, upselling, or complex menus.
**Current Regulatory Status**
Following the rule's overturn, the "click-to-cancel" rule is now *vacated* and no longer federal law. This means there is currently no nationwide FTC mandate requiring easy, same-method subscription cancellations at the federal level. However, state-level consumer protection laws remain in effect, with some states like New York continuing to enforce regulations against obstructive cancellation practices and penalise companies that make it difficult to cancel subscriptions.
The court invalidated the rule on the grounds that the FTC did not follow proper legal procedures in rule-making. As a result, until new federal regulations are enacted, consumers must generally rely on the terms and conditions of each subscription and state laws for cancellation rights, often facing complex or burdensome cancellation processes in the absence of a uniform federal standard.
**The Road Ahead**
The court's ruling leaves a regulatory gap at the federal level for subscription cancellation protections. Consumers facing difficulty in canceling subscriptions may still seek relief at the state level, but lack a simple universal federal safeguard as had been proposed by the FTC rule. The absence of a federal standard could potentially lead to inconsistencies in subscription cancellation practices across different states and industries.
In conclusion, there is currently no federal "click-to-cancel" requirement in force. Subscription cancellation regulations are mostly governed by state laws and individual company policies. Consumers seeking to cancel subscriptions may need to carefully review the terms and conditions of their subscriptions and familiarise themselves with their state's consumer protection laws to ensure they are not subjected to complex or burdensome cancellation processes.
- The recent decision by the US federal appeals court has left technology companies free from the FTC's "click-to-cancel" rule, making it difficult for consumers to find a uniform method for subscription cancellation across multiple states and industries.
- As the federal "click-to-cancel" rule has been vacated, businesses now have more leeway in their subscription cancellation policies, potentially leading to complex and varied cancellation processes for consumers.
- Despite the setback at the federal level, some states, like New York, continue to enforce regulations against difficult subscription cancellation procedures.
- In the future, the absence of a federal standard may lead to an increase in general-news articles on tech platforms discussing the intricacies of subscription cancellation practices and offering advice to consumers on how to navigate these processes effectively.
