FTC delays click-to-cancel rule enforcement, giving companies more time to simplify cancellations

[midian182]

What just happened? The FTC's enforcement of the amended Negative Option Rule, often known as the click-to-cancel rule, has been delayed by two months after the agency voted to defer the compliance deadline. The rule will likely be welcomed by consumers as it forces companies that offer subscriptions to make canceling them a simple process, instead of the often complex – sometimes intentionally – procedure that many firms have in place.

It was back in March 2023 when the FTC proposed a click to cancel provision that would require companies to make the process of canceling recurring subscriptions as simple as signing up for them.

The Rule Concerning Subscriptions and Other Negative Option Plans was ratified by the FTC in a 3-2 vote in October 2024. It amends the Negative Option Rule first introduced in 1973.

A negative-option offer is any deal where a seller treats your silence – or failure to take a specific action – as permission to be charged or sent goods. Typical examples are subscription boxes that keep shipping (and billing) until you cancel, free trials that roll into paid plans, or "book-of-the-month" style clubs that ship unless you say "no."

In a move that surprised no one, companies from the telecom, advertising, and newspaper industries – those renowned for making their subscriptions so hard to cancel that it puts people off even trying – filed multiple lawsuits to block the click-to-cancel regulation the same month it was passed. The US Chamber of Commerce, the Interactive Advertising Bureau, the Electronic Security Association, and the Internet and Television Association (NCTA) argued that the rule limits a firm's ability to talk customers out of canceling their cable or other services. They also claimed it violated companies' First Amendment protections.

The FTC says that the rule actually went into effect on January 19, but the enforcement of some provisions was delayed until May 14. Now, the FTC has voted 3-0 to delay enforcement for 60 days, pushing the date to July 14, 2025.

The FTC writes that the reason for the delay is to give companies ample time to adjust their systems and procedures so they adhere to the rule and make canceling their subscriptions easier. Businesses were already given 180 days to comply, but it seems the FTC now believes they need another two months.

While companies will still be able to offer free trials, canceling them and other subscriptions should be a much less arduous task in the future – certainly nothing that involves phone calls and keeping customers on hold for so long that they simply give up.

Masthead: Elisa Ventur; center: Marques Thomas

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FTC delays click-to-cancel rule enforcement, giving companies more time to simplify cancellations

 

[candle86]

I wish they could do this for gyms. I canceled my membership so I thought, found out later they still think I'm a member and now that I owe them $300 in ast dues they can only offer to pause for one month but won't cancel until I catch up. It's a scam I'm tired of it

 

[Lowhangingfruit]

This is pretty much guaranteed to be cancelled by the current regime. Somewhat hypocritical that the current administration would love to have a click-to-cancel button for their own deregulation agenda, but don't want to provide this service to normal people.

 

[wiyosaya]

Somehow, I am not surprised. IMO, the current administration could not give a S about consumers.

I wish they could do this for gyms. I canceled my membership so I thought, found out later they still think I'm a member and now that I owe them $300 in ast dues they can only offer to pause for one month but won't cancel until I catch up. It's a scam I'm tired of it

Been there - only when my card was fraudulently used to pay for someone's gym membership.

I'll suggest reporting this to your credit card company, and ask them to permanently prevent the particular gym from charging your card in the future. Also, tell them you have tried to cancel your membership and they refused. You might be able to get the CC company to honor a claim of fraud.

Plus, write a letter to the gym telling them that you are cancelling your membership. I'm betting the gym is the same one that continue to allow fraudulent use of my card. They used to be named after a city in the western US.

 

[candle86]

Somehow, I am not surprised. IMO, the current administration could not give a S about consumers.

Been there - only when my card was fraudulently used to pay for someone's gym membership.

I'll suggest reporting this to your credit card company, and ask them to permanently prevent the particular gym from charging your card in the future. Also, tell them you have tried to cancel your membership and they refused. You might be able to get the CC company to honor a claim of fraud.

Plus, write a letter to the gym telling them that you are cancelling your membership. I'm betting the gym is the same one that continue to allow fraudulent use of my card. They used to be named after a city in the western US.

Planet fitness, only allowed to cancel at my home gym while the manager is onsite in person or sending a certified letter, I mistakenly talked to an assistant manager who doesn't have the authority, and now I live 500 miles away but they can't change home gym while my account is negative nor allow cancel until paid. I stupidly used my bank account, but my next direct deposit is into a new joint account with a different bank I setup with my wife, then I'm going to tell my current bank to freeze my old checking account and walk away for it. I guess planet fitness can take me to court later and I can explain this all to a judge.

 

[yRaz]

I owe anytime Fitness $400 because I have to send them certified mail saying I want to cancel. Worst part is that that they were unable to complete delivery because anytime Fitness refused acceptance of the letter amd they charged me for 3 months after that. Reversed the charges on my credit card and they sent me to collections.

Scumbags.

 

[brucek]

Feels like it would be a lot more efficient to implement this rule at the credit card / payment processor level. There are millions of businesses out there but relatively few big payment interconnects. Let the consumer tell Visa they are done paying 24 Hour Fitness, let Visa relay that news to them and block any future charges, and at that point the vendor can "work on their cancellation process" at their own speed. Which I bet will suddenly be much faster & easier task once the revenue part has already stopped.

 

[wiyosaya]

Sounds like the fitness "industry" has developed a standard means of ripping people off. Letters to state attorney general might help get laws passed or the companies sued by a bigger bear.

I'm sure you figured it out, but LA Fitness was the scumbag fitness firm in my case.

 

[wiyosaya]

Feels like it would be a lot more efficient to implement this rule at the credit card / payment processor level. There are millions of businesses out there but relatively few big payment interconnects. Let the consumer tell Visa they are done paying 24 Hour Fitness, let Visa relay that news to them and block any future charges, and at that point the vendor can "work on their cancellation process" at their own speed. Which I bet will suddenly be much faster & easier task once the revenue part has already stopped.

Part of the problem, from my standpoint, is the credit card industry. Little does everyone know, however, any merchant can sign up for updates to a credit card number and automatically receive this if the card they hold changes, in any fashion, including totally updated because of fraud.

Go figure!

LA Fitness registered my card that way, and even though I called them and told them that their member was not authorized to use my card, and my bank issued a new card, LA Fitness got the new number automatically when my bank issued the new card. It took several calls to my bank to finally have my bank totally deny LA Fitness' attempt to subsequently charge the newly issued cards. LA Fitness had no recourse as I notified them that the transactions were fraudulent.

 

[ZedRM]

The FTC needs to be firm and tell companies to get the lead out.

 

[Zintin]

I owe anytime Fitness $400 because I have to send them certified mail saying I want to cancel. Worst part is that that they were unable to complete delivery because anytime Fitness refused acceptance of the letter amd they charged me for 3 months after that. Reversed the charges on my credit card and they sent me to collections.

Scumbags.

Memberships are contracts. During the sign up you are allowed to strike-through parts of the contract and initial there (stating who did it). Before signing it. If it's only electronic then walk away IMO. The person at the desk isn't going to check for crossed out parts of a contract because they simply don't get paid enough to care.

 

[Loadedaxe]

Anytime I have a recurring charge on my debit card, I can simply logon to the bank and stop any future payments for that vendor. I have 3 bank accounts, one for my direct deposits, one to use for online purchases and one to use for local purchases, this costs me $14 a month. I can transfer money around on the fly on my phone.

Never had an issue cancelling a subscription.

Now if you use credit cards, well then shame on you.