Hunton Retail Law Resource

In a significant move, the Federal Trade Commission (FTC) has issued its final “Click-to-Cancel” Rule aimed at streamlining the cancellation process for subscription services. This Rule is a critical development for retailers, particularly those utilizing negative option marketing—where customers are automatically enrolled in subscriptions and must actively cancel to stop payments.

The FTC is once again taking issue with hidden fees, suing Adobe, Inc., alleging the company and two corporate executives deceived consumers by hiding the early termination fee for a popular subscription plan and making it difficult for consumers to cancel their subscriptions.

On March 23, 2023, the FTC issued a notice of proposed rulemaking aimed at deceptive and unfair practices involving recurring charges for automatically renewing subscriptions and memberships. The proposed rule is part of a broader FTC initiative designed to crack down on “dark pattern” tactics that retailers employ to aid in customer acquisition and retention, among other things. Difficult cancellation procedures for subscription-based services are one such tactic identified as problematic by the FTC and targeted by the new proposed rule.