FTC Cites Fatal Flaw For Killing Click-To-Cancel Rule At The Last Minute

The US Court of Appeals for the Eighth Circuit has ruled to vacate the Federal Trade Commission's "click-to-cancel rule" just days before it was slated to take effect on July 14, 2025.

For most of us, it's often the case that we find it easier to subscribe to a service than to cancel it. Apparently, this recurring issue has generated several consumer complaints, which led the FTC to propose a "click-to-cancel rule" to end recurring subscriptions and memberships. With this rule, the Commission sought to address "negative option marketing," which simply means that your failure to decline an offer would be considered a "yes" or a "nod" that you agree to be charged for the goods or services. Last October, the FTC finalized this rule. While it initially set a period of 180 days for it to become operative, it later extended it to July 14, 2025.

However, the new rule would no longer take effect as originally scheduled. In an appeal challenging the rule, the petitioners urged the court to vacate the rule because the Commission failed to follow the procedure required by the law (the FTC Act) by not conducting a preliminary regulatory analysis before issuing the rule.


The court agreed with the petitioners' contention and struck down the rule. In its remark, the court noted, "While we certainly do not endorse the use of unfair and deceptive practices in negative option marketing, the procedural deficiencies of the Commission's rulemaking process are fatal here."

This ruling will certainly be a setback to the FTC, which may now have to carry out a lengthy and resource-intensive process for a regulatory analysis. Moreover, it will also amount to a blow to consumers as it leaves them vulnerable to the same business practices that the FTC seeks to address.