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New ‘Click-To-Cancel’ Rules Take Effect In January
The Federal Communications Commission (FCC) 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. 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.
