On October 16, 2024, the Federal Trade Commission (“FTC”) released its Negative Option Rule. A “negative option” is an arrangement where goods or services are provided based on a consumer’s silence, a failure to take some affirmative action to reject or cancel. The most recognized type of negative option program is a subscription service with automatic renewal features.
The Rule, also known as the “Click-to-Cancel” Rule, will regulate the disclosure, consent, and cancellation requirements for companies utilizing negative options. Any company with automatic renewal subscriptions or memberships will be impacted by the Rule.
The FTC proposed a “Click-to-Cancel” rule provision in 2023, and after thousands of public comments, released the final version. The Rule is scheduled to go into effect 180 days after publication in the federal register (except the misrepresentations provision discussed below, which is scheduled to go into effect 60 days after publication in the federal register).
To read the full advisory, please click on the PDF below.