That was the thinking behind the Negative Option Rule — more popularly known as the “click to cancel” regulation, first proposed in 2023.
That rule went into effect earlier this year, with enforcement originally scheduled for May 14. Now, the Federal Trade Commission (FTC) says it will give businesses more time before the click-to-cancel rule goes into effect.
The commission voted Friday (May 9) to delay enforcement for 60 days, to give companies more time to prepare.
“Having conducted a fresh assessment of the burdens that forcing compliance by this date would impose, the Commission has determined that the original deferral period insufficiently accounted for the complexity of compliance,” the FTC said in a statement.
The FTC’s vote was 3-0. Typically, the commission has five members, but President Donald Trump has fired its two Democratic members, who are suing the president.
Once the extended deadline is passed, the FTC says it will begin enforcing the rule July 14, when “regulated entities must be in compliance.”
As PYMNTS has written, the rule requires companies to make it as easy for consumers to cancel their subscriptions, memberships, and other recurring payment programs as it was to sign up. It will apply to almost all negative option programs — those that renew automatically unless the consumer cancels — in any media, the FTC has said.
“Too often, businesses make people jump through endless hoops just to cancel a subscription,” then-FTC Commission Chair Lina M. Khan said in announcing the rule. “The FTC’s rule will end these tricks and traps, saving Americans time and money.”
A group of trade associations sued the FTC over the rule last year, saying the regulation exceeded the commission’s authority.
The initial rule was in response to widespread frustration with complicated processes, and part of a larger effort by the Biden White House to combat “junk fees.”
“The move aligns with a broader trend where companies, including Capital One, Atomic and Mastercard, are rolling out subscription management tools to help consumers easily track and manage their recurring expenses,” PYMNTS wrote last year.
“These developments highlight the industry’s move toward subscription models in response to rising operational costs. While increasing prices may boost revenue, the measure risks alienating cost-sensitive consumers in an environment with numerous subscription service options.”
