The click-to-cancel rule, meant to make it as easy for consumers to cancel a subscription as it is to sign up for one, met its fate just six days before it was supposed to go live.
A federal appeals court last Tuesday blocked the rule from taking effect. The Federal Trade Commission, under the leadership of Lina Khan in the Biden administration, failed to come up with a preliminary regulatory analysis — a procedural error that led to the rule’s downfall, the court said.
Though the rule was touted by consumer rights groups and CX experts, it was met with ire by businesses that heavily rely on subscriptions.
The rule would have prohibited companies from misrepresenting subscriptions and required businesses to provide consumers with a simple method to halt all recurring charges.
Though the rule was blocked, its ethos shouldn’t be, experts told CX Dive. Subscriptions can offer a seamless way for a customer to enter a relationship with a company, but companies shouldn’t make a business out of trapping consumers in them, they say.
Instead, businesses can address the customer experience pain points the rule intended to tackle and make their cancellation processes easier and more transparent.
“From an ease perspective, if it takes only a couple of clicks to sign up for a subscription or a membership, it should take no more than that level of effort to end it,” Judy Weader, principal analyst at Forrester, said in an email.
Click to cancel’s champions and detractors
Canceling memberships and subscriptions to gyms, cable and internet providers, retailers and gaming companies is notoriously difficult, with complaints riddling online forums.
The FTC under the Biden administration said it fielded thousands of complaints from customers every year — nearly 70 a day in 2024.
“This was meant to solve a long-standing problem, where it’s really easy to get into a relationship with a company, maybe for a trial subscription or membership, and then it feels like it takes a ridiculous amount of effort to extract yourself from that relationship,” Weader said.
Some businesses would use deceptive tactics to keep customers paying.
“In some cases, notification wasn’t happening until after a renewal had gone through, so many consumers constantly felt wrong-footed,” Weader said. “This rule was intended to solve that imbalance.”
Click to cancel was part of the Biden administration’s “Time Is Money” initiative, which aimed to crack down on companies that purposefully provide poor customer service in order to maximize profits.
“From an ease perspective, if it takes only a couple of clicks to sign up for a subscription or a membership, it should take no more than that level of effort to end it."
Judy Weader
Principal analyst at Forrester
But business groups like the Chamber of Commerce opposed the rule and sued to block it. The regulation, Neil Bradley, EVP and chief policy officer at the Chamber, said would “deter businesses from providing sensible, consumer-friendly subscriptions.”
The Trump administration has taken a more business-friendly approach and rolled back many of the FTC’s regulations. Under new Republican leadership this spring, the FTC voted to delay the rule’s enforcement until July, saying the delay would provide more time to comply.
Some consumer rights groups said the FTC’s delay paved the way for it to be overturned.
“Now, by slow-walking a simple, massively popular protection, they’ve ensured that hardworking people will keep getting stuck with subscriptions they don’t want or can’t afford from cable companies, gyms, and online services,” Nidhi Hegde, executive director of the American Economic Liberties Project, said in a prepared statement. “If the FTC is serious about affordability for everyday Americans, it must reissue the rule immediately.”
The Chamber of Commerce welcomed the ruling to vacate click to cancel. “The decision provides a safeguard against rushed rulemaking and reinforces the importance of agencies addressing public concerns,” the organization said in a statement.
The U.S. Court of Appeals for the Eighth Circuit did not rule on the merits of the regulation itself, but instead focused on the FTC’s procedural steps.
“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,” the court said.
Embracing the spirit of click to cancel
Blocked or not, businesses can apply the intent of the rule to update their cancellation processes.
While a hard-to-cancel subscription may provide consistent sales from trapped consumers, customer experience — and referrals — can suffer.
“Frankly, while it may seem, from a company’s perspective, that it’s better to create barriers to departure or switching, enforcing captivity creates the kind of ill-will with consumers that’s easily spread on social media and that can tarnish a brand’s reputation,” Weader said. “Increased transparency helps build trust, while opacity and deceptive patterns erode it.”
"I do hope businesses will make the right choice and, despite this temporary block, proceed with experiential changes that honor the spirit of the new regulation."
Jon Picoult
Founder and Principal of Watermark Consulting
Given that the rule was meant to go into effect this month, some businesses may have already implemented or queued up modifications to their cancellation processes. Leaders shouldn’t throw those modifications away, said Jon Picoult, founder and principal of Watermark Consulting, a customer experience advisory firm.
“I do hope businesses will make the right choice and, despite this temporary block, proceed with experiential changes that honor the spirit of the new regulation — that is, making cancellation transactions as easy as purchase transactions,” Picoult said in an email.
Brands can improve the subscription and cancellation experiences by making the agreements clear and eliminating friction in the user experience.
“Cancellation buttons or processes should be easy for customers to access,” Weader said. “Similarly, while it’s okay to show customers retention offers, it needs to be a short-and-sweet attempt that doesn’t drag on or use deceptive patterns to confuse them about whether or not they were able to achieve their cancellation goal.”
Businesses don’t need to abide by the strictest interpretation of the rule, which would have been akin to one-click cancellation, Picoult said. Companies can respond to cancellation requests with attempts to save the customer with reminders of benefits of the subscription or a solicitation of feedback so it can improve the subscription or product offering.
“The problem arises when businesses bombard the customer with repeated save attempts and new offers, injecting unnecessary friction into the cancellation process — and it’s those abuses that demonstrate the need for better regulation,” Picoult said.
Businesses don’t want to be known as the brand that has a difficult unsubscribe process, said Michael Della Penna, chief strategy officer at InMarket, a marketing and measurement company.
“If you’re offering an exceptional product or service, they won’t want to [leave],” Penna said in an email. “Instead of making it difficult for customers to leave, focus on understanding why they want to. Adding a simple multiple-choice question to the cancellation process can uncover incredibly valuable insights for improving the customer experience.”
Is this the end of click to cancel?
The court blocked click to cancel on a technicality in the rulemaking process. That technicality could be overcome should the FTC decide to complete the required regulatory analysis and revive the rule.
“The appeals court blocked the new rule on procedural grounds, so it’s unclear how the judges will rule on the actual merits of the new regulations — though the current political winds would suggest that they may not look kindly upon imposing these new requirements on businesses,” Picoult said.
The future of it under the current administration does not look rosy. The FTC commission is usually staffed by five commissioners, but after President Donald Trump fired two Democratic members in March, it's been staffed with only three Republican commissioners. Two of those commissioners dissented to the rule when it was passed.
Consumer rights groups are urging the FTC to pass the rule and for state lawmakers to take up the mantle where the federal government doesn’t.
