ARTICLE
21 October 2024

New FTC Rule Makes Cancelling Negative Option Plans Easier

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Cozen O'Connor

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Founded in 1970, Cozen O’Connor has more than 925 attorneys practicing internationally in 32 cities across North America and Europe. We are a full-service firm with award-winning practices in litigation, business law, and government relations, and our attorneys have experience operating in all sectors of the economy. Our diverse client list includes global Fortune 500 companies, middle-market firms poised for growth, ambitious startups, and high-profile individuals.

The FTC has finalized a new "Click-to-Cancel" rule to protect consumers from unfair or deceptive practices when seeking to cancel their enrollment in subscription services...
United States Media, Telecoms, IT, Entertainment
  • The FTC has finalized a new "Click-to-Cancel" rule to protect consumers from unfair or deceptive practices when seeking to cancel their enrollment in subscription services, memberships, and other recurring-payment programs.
  • The rule—which amends the FTC's Negative Option Rule—applies to all negative option programs in any media, and requires a simple mechanism to be provided to cancel a negative option feature and immediately halt charges. It also prohibits misrepresentations of any material fact while marketing goods or services using negative option features; requires sellers to clearly and conspicuously disclose material terms prior to obtaining consumers' billing information in connection with a negative option feature; and requires express informed consent from a consumer prior to any charges.
  • A bipartisan coalition of 26 AGs previously filed a comment letter in support of the FTC's proposed amendments to the Negative Option Rule.

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