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Everything You Need to Know About The FTC’s Click-to-Cancel Rule
- Serena Mastin
- Feb 21
- 4 min read
If you subscribe to any marketing newsletters, you’ve probably heard of the FTC’s new rule. "Click-to-Cancel" is coming, and it will likely disrupt a lot of subscription-based businesses. This rule could go into effect as early as March of 2025, so it’s important that you know exactly what is to keep your company compliant. Here’s a quick overview of everything you need to know about Click-to-Cancel and how it might affect your business.
What is the Click-to-Cancel Rule?
Imagine a future where you could cancel an online subscription as easily as you unsubscribe from a mailing list. That future may become a reality sooner than you think. The FTC’s newly proposed Click-to-Cancel rule seeks to do exactly this, and it could go into effect as early as March 2025. And while this new rule may seem like a godsend to frustrated online consumers who have more unused subscriptions than they can count, it’s a potential nightmare for some online businesses.
The Federal Trade Commission's new Click-to-Cancel rule aims to make it easier than ever for consumers to cancel online subscriptions. It requires that companies offer a straightforward, online cancellation process that’s just as easy as signing up. (Unfortunately, that’s a lot easier said than done). This new rule seeks to curtail dodgy business practices, like negative option marketing, where a customer’s inaction is interpreted as acceptance of an offer.
The FTC’s proposed Click-to-Cancel rule would require:
1. Clear Communication: Sellers must provide important information before obtaining a
customer’s billing information and charging them. Important information must be truthful, clear, and easy to find. This prevents hidden fees or vague terms that can lead to misunderstandings.
2. Informed Consent: Sellers must prove that customers knew what they agreed to before they signed up.
3. Easy Online Cancellation: There always has to be a way to cancel that’s as quick and
easy as it was to sign up. This prevents consumers from having to call or navigate
complicated processes to cancel a subscription.
4. Reminders for Renewals: Businesses must send clear reminders before a subscription is set to renew, allowing consumers to make informed decisions about whether to
continue.
Failing to comply with FTC regulations could result in lawsuits and civil penalties.
To better understand the Federal Trade Commission’s Click-to-Cancel policy, we need to first look at how this rule relates to negative option marketing more generally.
What is Negative Option Marketing?
In 2024, the Commission received about 70 consumer complaints about negative options and recurring subscription practices per day, up from 42 per day in 2021.
The "Click-to-Cancel" rule is part of the FTC’s broader Negative Option Rule, which prevents customers from being tricked into paying for goods or services they didn’t intend to buy.
Negative option marketing generally falls into four categories:
1. Prenotification Plans: Seller first offers and then sends (and charges for) a product if the consumer takes no action to decline the offer. Examples: Book-of-the-month Clubs
2. Continuity Plans: Consumers agree in advance to receive period shipments of goods or
provision of services until they cancel the agreement. Examples: Bottled Water Delivery
Service
3. Automatic Renewals: A subscription is automatically renewed when it expires unless the customer cancels. Examples: Magazines, Streaming Services
4. Free Trial: Customer receives a product or service for free (or at a reduced price) for a
trial period and then is charged a higher price unless they cancel or return it. Examples:
Premium Subscriptions
To combat negative option marketing, the FTC is working to establish a framework for
transactions that require informed consent before customers can be charged. The Click-to-Cancel rule is a wide sweeping update to the Negative Option Rule that will help ensure that customers aren’t deceived by tricky business practices into signing up for unwanted products and services.
How the Click-to-Cancel Rule Will Affect Your Business
Unfortunately, this newest regulation will likely create additional hoops for online businesses to jump through. Even companies with the best intentions might get tripped up by the engineering work needed to stay compliant with all these new requirements. Because, let’s face it, building a website isn’t easy, and neither is building a marketing funnel.
Your website configuration and marketing automation might create trapdoors for you to fall through. Oversights could result in customers stumbling upon an old web page or being accidentally sent an outdated email that leads them to sign up for a free trial or subscription service without understanding the full extent of your offer. One way to prevent this is to have your developer team spend months combing your website and CRM to weed out every outdated link and change any problematic verbiage. Another option is to partner with a fractional marketing company that focuses on creating marketing funnels that are compliant with the most up-to-date FTC regulations.
How to Stay Compliant
Staying compliant can be tricky. Here’s the Top 5 Ways to Avoid Penalties:
1. Conduct a Compliance Audit
2. Redesign Cancellation Processes
3. Update Disclosures and Obtain Clear Consent
4. Train Customer Service Team
5. Align Marketing Language
Luckily, there are companies that specialize in this sort of thing. Pulse Marketing is a fractional marketing company that has been helping clients from across different industries build marketing funnels that meet all of the FTC’s meticulous regulatory standards. For over a decade, our team of developers, content writers, and graphic artists have crafted high- converting content without relying on negative option marketing.
About Pulse Marketing
For the past ten years, Pulse Marketing has been honored to help hundreds of businesses grow, earning over 60 advertising awards along the way. But what matters most to us isn’t the accolades—it’s the success of the people we serve.
Unlike big ad agencies, we take a personal approach, offering flexible, scalable solutions
designed specifically for small and medium-sized businesses. We’ll take the time to truly
understand your business, working side by side with you to achieve your unique goals. Let’s build something great together!
Meet the expert:
Serena Mastin is the founder of Pulse Marketing Inc., an award-winning agency driven by a passion for service. With over two decades of experience working with businesses nationwide, she has navigated both entrepreneurial challenges and personal tragedy. Through it all, she remains dedicated to empowering others and making a lasting impact.
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