U.S. Court Of Appeals Tosses Federal Trade Commission’s ‘Click-To-Cancel’ Rule Aimed At Making Subscription Cancellations Easier

U.S. Court Of Appeals Tosses Federal Trade Commission’s ‘Click-To-Cancel’ Rule Aimed At Making Subscription Cancellations Easier

Efforts to make canceling subscription services easier were shut down by a U.S. court.

Just days before the Federal Trade Commission’s new “click-to-cancel” rule, designed to make canceling subscriptions as easy as signing up, was set to take effect, the U.S. Court of Appeals for the Eighth Circuit struck it down.
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The court ruled that the FTC didn’t follow proper procedures under the FTC Act during the rule-making process, stating:

“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… Vacatur of the entire Rule is appropriate in this case because of the prejudice suffered by Petitioners as a result of the Commission’s procedural error.”
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The rule, scheduled to launch on July 14, would have required companies to allow cancellations using the same method used to sign up, banning tactics like long chat sessions with agents or hard-to-find cancel buttons. It aimed to modernize the FTC’s 1973 approach to “negative option” subscriptions, which auto-renew unless users actively opt out.

 

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Businesses celebrated the ruling, arguing that the FTC overstepped its authority by skipping necessary procedural steps. Meanwhile, New York Attorney General Letitia James, who had encouraged consumers to prepare for the rule, responded to the court’s decision, saying:

“New Yorkers should never have to jump through hoops just to cancel an unwanted subscription.”

Her office is currently reviewing the ruling.
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Complaints about subscription traps have reportedly surged in recent years, highlighting a growing demand for consumer safeguards. Now, the FTC will likely need to restart its rulemaking process from scratch, and experts say the agency’s approach to future consumer protection rules could shift significantly following this setback.

Do you think stronger protections are needed to shield consumers from predatory subscription practices? 

[VIA]