The FTC's 2024 click-to-cancel rule, vacated in 2025: what still protects subscribers in 2026

Streaming plans, camera cloud storage and other device subscriptions renew on their own until you stop them. In October 2024 the Federal Trade Commission adopted a rule meant to make stopping them as easy as starting, but businesses never had to comply with its disclosure, consent and cancellation sections. On July 8, 2025, the United States Court of Appeals for the Eighth Circuit vacated the 2024 rule in full, and on February 12, 2026, the FTC put the pre-2024 text back into the federal regulations. Here is what the rule would have done, why it fell and what applies on November 11, 2026.

What the 2024 rule would have required

The FTC announced the final rule on October 16, 2024, after a 2023 proposal that drew more than 16,000 comments. The vote was 3-2, with Commissioners Melissa Holyoak and Andrew N. Ferguson against. Published on November 15, 2024, it took effect on January 14, 2025, with a compliance date of May 14, 2025, for its disclosure, consent and cancellation sections. It reached negative option programs in any medium, such as automatic renewals and free trials that turn into paid plans, and made four things violations:

• misrepresenting any material fact while marketing with a negative option feature
• failing to disclose the material terms clearly and conspicuously before taking a customer's billing information
• charging a customer without express informed consent to the negative option feature
• failing to offer a simple way to cancel that stops recurring charges at once

The cancellation section, which the FTC labeled “Click to Cancel”, required a method at least as easy to use as the sign-up, in the same medium. Online, it had to be easy to find, and nobody who signed up without a live or virtual representative, such as a chatbot, could be made to use one to cancel. A phone line had to be answered or take messages during normal business hours and cost no more than the call used to enroll. The final version dropped a proposed annual reminder and a proposed limit on retention offers.

Chair Lina M. Khan said that “Nobody should be stuck paying for a service they no longer want.” Commissioner Holyoak's dissent argued that the rule went far beyond the inquiry the FTC first announced, generalized from complaints in particular industries to the whole economy and did not show the practices were “prevalent”. She added that she was “very concerned that consumers are sometimes misled by companies using deceptive negative option features”, and called the rule “a missed opportunity to make useful amendments to the preexisting negative option rule within the scope of the Commission's authority”.

Why the court set it aside

Businesses and trade groups, among them the U.S. Chamber of Commerce, the National Federation of Independent Business, the Interactive Advertising Bureau and NCTA-The Internet & Television Association, challenged the rule in four appeals courts, and the cases were consolidated in the Eighth Circuit. They argued it exceeded the FTC's authority, skipped a required preliminary regulatory analysis and was arbitrary. The FTC answered that it targeted defined practices, rested on “copious evidence” and needed no preliminary analysis because the agency's first estimate of its economic impact did not exceed $100 million a year. The court refused to pause the rule during the case, and on May 9, 2025, the FTC moved its compliance deadline to July 14, 2025.

The court decided on the procedure alone. In April 2024 the administrative law judge who presided over the FTC's informal hearing had found that the proposed rule's annual effect on the economy would pass $100 million, the threshold for the analysis under section 22 of the FTC Act, yet the Commission issued only a final analysis. The panel held that the omission cost the challengers an earlier chance to engage with the FTC's cost and benefit estimates and with alternatives, and that the error was prejudicial, given the close vote and a lengthy dissent. It did not rule on the other challenges, and despite a severability clause it vacated the whole rule, finding a vacatur limited to the parties not feasible.

What applies to subscriptions today

The current eCFR shows 16 CFR Part 425 under its pre-2024 name, Use of Prenotification Negative Option Plans. That 1973 rule covers only plans in which a seller announces each shipment and sends and bills for it unless the member declines, as book-of-the-month clubs do. Sellers must disclose seven terms, allow at least 10 days to decline a selection and honor written cancellations from members who have met any minimum purchase. An FTC paperwork notice of October 14, 2026, says this restored version governs prenotification plans, and FTC staff estimate there that no more than 25 sellers are subject to its disclosure requirements.

Subscriptions sold online or by phone, such as cloud plans for cameras, fall under other laws, which the FTC listed in its March 2026 notice:

ROSCA provides that a violation is treated as a violation of an FTC rule, which lets the FTC seek civil penalties as well as redress. The March notice also cites state laws, naming California, Colorado, Vermont and Virginia, which give people in those states varying protection. In it, the FTC said that since January 2025 it had started five cases alleging negative option misconduct and approved six settlements, including a stipulated order with Amazon in September 2025.

What the FTC is weighing now

The March 2026 notice is an advance notice of proposed rulemaking, the first formal step under section 18 of the FTC Act, and it contains no proposed rule. It asked whether the current rule is still needed, whether practices outside it need rules, and whether to keep the rule, adopt parts of the vacated 2024 rule or rely on alternatives such as consumer and business education. The FTC said complaints about negative option marketing rose from at least 33 a day in late 2020 to more than 90 a day in 2025.

Christopher Mufarrige, Director of the FTC's Bureau of Consumer Protection, said subscriptions “can offer procompetitive features”, such as lower transaction costs and uninterrupted service, but that the agency's enforcement record suggests they “continue to be plagued by difficult cancellation processes, unlawful retention tactics,” and other obstacles. If the FTC goes ahead, the next step under section 18, as the court describes it, is a notice of proposed rulemaking that states the rule's text. On November 11, 2026, the FTC's rule page listed no proposal after the March notice.

The FTC asks people to report bad business practices at ReportFraud.ftc.gov. Our guide to the FTC's shipping rule notes that it exempts plans covered by the negative option rule.