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FTC’s “Click to Cancel” Rule Is Finalized
The Federal Trade Commission (FTC) announced approval of the final version of its so-called click-to- cancel rule on October 16, as part of its overall review of the “negative option” or automatic renewal regulations.
FTC staff has developed a fact sheet summarizing the changes to the rule.
The new rules take effect 180 days after publication in the Federal Register. The FTC summarized the regulations as prohibiting: (1) misrepresenting any material fact made while marketing goods or services with a negative option feature; (2) failing to clearly and conspicuously disclose material terms prior to obtaining a consumer’s billing information in connection with a negative option feature; (3) failing to obtain a consumer’s express informed consent to the negative option feature before charging the consumer; and (4) failing to provide a simple mechanism to cancel the negative option feature and immediately halt charges. The FTC’s decision states that companies seeking an exemption from these rules – e.g., because similar rules are already in force under a state government agency – must demonstrate the qualification for the exemption under the FTC’s existing procedures.
Final “Click-To-Cancel” Rule
Federal Trade Commission Matter No. P064202 (Opened on 11/04/2021)
