NEW YORK, NY, NOVEMBER 5, 2026 — Even though there is currently no federal regulation that requires companies to follow certain guidelines when handling customer requests to cancel subscriptions, the Federal Trade Commission (FTC) is paying more attention than ever before to what companies do after a consumer attempt to cancel their subscription. The FTC recently announced that it would be continuing its rulemaking process regarding the use of automatic renewal clauses in contracts. In addition, the FTC will continue bringing enforcement actions against companies that engage in unfair practices related to the cancellation of subscriptions. Both consumers and companies that provide subscriptions are being forced to adapt to this new environment of regulatory uncertainty, reflecting trends in enterprise cloud computing.
The Rule That Was Struck Down
The Federal Trade Commission made changes to its negative option rules, sometimes referred to as “click to cancel”, in October of 2024. The changes would have forced businesses to provide customers with a way to cancel their subscriptions or memberships that was equally simple to sign up for. On July 8th of 2025, the U.S. Court of Appeals for the Eighth Circuit threw out those regulations because of a procedural error.
The court did not make a decision about whether easy cancellations are an appropriate policy. The Federal Trade Commission initiated a new procedure this year for requesting input from the public, and advertisements appeared in the Federal Register. If the FTC decides to create a new regulation, it must complete all necessary steps, including a preliminary analysis of potential expenses associated with the proposed regulation, before the regulation can be reviewed, tracked via equity market reports.
The vacated rule was also used for disclosure and consent. Because of this, some firms have already modified how they conduct customer sign-ups. Other firms have maintained the modifications because they believe that their customers now anticipate these types of changes. Finally, other firms have decided to wait until there is better direction on the matter before making any investment in updating their current systems.
Different businesses have taken different actions. There are some large companies that have made it easier for customers to cancel across the country, as they are subject to various state regulations. Other companies are taking a “wait and see” approach until they find out exactly what the FTC will propose prior to altering their own procedures.
What Still Applies Today
The ROSCA (Restore Online Shoppers’ Confidence Act) has been passed into law and is designed to require businesses to clearly state their policies/terms, obtain explicit permission from customers, and provide customers with an easy method for canceling subscription-based services. In addition to being enforced by the FTC, the ROSCA is enforced under the FTC Act, Section 5, which prohibits unfair or misleading business practices. Many businesses have had action taken against them under both laws, analyzed in corporate financial filings.
Many of the different states across our nation have developed automatic renewal statutes, and many of these statutes also mandate that companies offer an option for customers to cancel their subscriptions online. The attorneys general from each state collaborate with one another through various organizations including the National Association of Attorneys General. Many companies that operate nationally tend to apply the most restrictive law possible so they don’t have to deal with a patchwork of laws.
Federal agencies, in addition to the Federal Trade Commission, are involved as well. For example, the Consumer Financial Protection Bureau handles complaints regarding recurring fees associated with financial services. These federal agencies provide multiple options for consumers to obtain assistance.
Practices Under Scrutiny
Hidden fees, difficult to locate “cancel” buttons, and requiring phone contact with a customer service agent who will attempt to retain the customer through various promotions are some of the ways that companies are being investigated by regulators. Regulators see these practices as potential violations of fair business practices, which could result in customers continuing to pay for services that they wish to discontinue, highlighted in tech industry forecasts.
The same type of focus is given to “free trials” which automatically become “paid subscriptions” without giving users prior notice. In addition, regulatory enforcement has resulted in both refunds to consumers, as well as updated policies regarding cancellation processes, for the businesses affected. These types of large-scale settlements indicate that regulators view this as an area where many consumers may be being taken advantage of.
Industry groups have stated that retention offers are designed to assist consumers in finding more suitable plans than what they currently have, and therefore, regulations should permit these offers. Conversely, consumer advocacy groups argue that the retention offers are actually barriers to consumers cancelling their service. As regulators evaluate the proposed regulatory framework, they will need to consider both sides of this debate.
What Consumers Can Do
All subscribers should retain confirmation e-mails, screenshots, and dates of when they attempted to cancel. The Federal Trade Commission (FTC) provides information about how to contest unauthorized charges on its consumer protection website. In addition, credit card companies allow customers to contest charges that occur after their account has been closed, monitored by financial analyst networks.
Monthly checking of statements allows for early detection of forgotten subscriptions. A calendar reminder prior to a trial period ending will provide the opportunity to determine if a service should be kept or canceled, as well as avoid unexpected automatic renewal. Individuals experiencing barriers may submit complaints to both Federal and State agencies; these submissions assist investigators in identifying patterns.
Firms can mitigate risk by providing customers with a way to cancel their services in the same manner they signed up for them. Providing customers with transparent prices, easy access to their account settings, and timely confirmation emails will also help firms avoid being subject to complaints or enforcement action.
