Federal Appeals Court Repeals FTC's Click-to-Cancel Regulation

In a significant legal development, the Eighth Circuit Court of Appeals has overturned the Federal Trade Commission's (FTC) 'click-to-cancel' rule, which aimed to simplify the process for consumers wishing to unsubscribe from services. The ruling, issued on July 8, 2025, comes just days before the regulation was set to be implemented on July 14. The court found that the FTC had failed to adhere to necessary procedural requirements during the rule-making process, leading to the vacatur of the entire regulation.
The 'click-to-cancel' rule was designed to ensure that consumers could cancel subscriptions using the same method they chose to enroll, eliminating unnecessary hurdles such as lengthy customer service chats. According to the FTC, the regulation sought to address the increasingly common practice of negative option marketing, where businesses interpret customer inaction as consent to ongoing charges. This practice has garnered significant consumer complaints, with the FTC receiving nearly 70 complaints per day in 2024, a marked increase from 42 complaints per day in 2021.
The ruling represents a considerable victory for businesses that had opposed the FTC’s authority to implement consumer protection measures without following mandated procedures. The court's opinion stated, "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."
New York Attorney General Letitia James, who advocated for the rule’s implementation, expressed disappointment at the court's decision. In a press release, she emphasized that "New Yorkers should never have to jump through hoops just to cancel an unwanted subscription." Her office is currently reviewing the implications of the ruling, which could affect similar consumer protection efforts across the country.
The FTC's original regulation was intended to cover a wide range of negative option programs, including those operating through various media platforms. The prior rule, established in 1973, was limited in scope and did not adequately address contemporary subscription practices.
The court's decision may necessitate the FTC to revisit its rule-making processes and could reshape how the agency approaches future consumer protection regulations. The ruling follows recent legal actions in New York where James secured penalties against companies, such as Equinox, for making cancellations difficult. The outcome of this case may influence lawmakers and enforcement agencies as they seek to balance consumer rights with regulatory frameworks.
Experts are now considering the broader implications of this ruling on consumer protection. Dr. Emily Roberts, a professor of Consumer Law at Yale Law School, remarked, "This decision illustrates the complexities of regulatory authority and consumer rights, especially in the digital age where subscription models are prevalent."
Moreover, industry leaders are closely monitoring the situation. Mark Thompson, CEO of Consumer Rights Coalition, stated, "While we understand the need for consumer protections, we also recognize that regulatory processes must be followed to ensure that rules are fair and enforceable."
In light of the court's decision, the FTC may need to re-evaluate how it formulates rules to protect consumers, ensuring compliance with legal requirements while still addressing the pressing issues of consumer rights in subscription-based services. As the landscape of consumer behavior continues to evolve, so too will the legal frameworks that govern it, potentially leading to further reforms in the near future.
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