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FTC's Click to Cancel movement likely here to stay

The FTC's Click to Cancel plan has staying power because numerous states are involved in the movement.

Don Fluckinger
By
Published: 11 Dec 2024

Think an incoming pro-business federal government can take down the idea of Click to Cancel, which gives consumers the power to end subscriptions as easily as they signed up? Think again.

At first glance, it might seem that because of procedural challenges to the Federal Trade Commission's final rule, as well as an incoming Republican agency chair and majority Republican government -- including its judiciary -- wary of regulations in general, Click to Cancel could be dead before it's slated to go into effect Jan. 14.

Unlikely, said Alexis Amezcua, a litigation partner at law firm Morrison & Foerster, because it's more than just a federal regulation.

Currently, California, Colorado, Illinois, Minnesota, New York, South Carolina, Tennessee, Utah, Vermont and Virginia also have enacted Click to Cancel laws -- also known as negative option laws. Some state statutes are even more aggressive than the federal rule. For example, California includes verbiage not found in the federal rule: Companies must present auto-renewal terms in a "clear and conspicuous manner" within close proximity either verbally or in print to obtain the consumer's consent to those terms.

"This rule is one of many in a fabric, if you will, of statutes around the country that are seeking to regulate and legislate negative option subscriptions," Amezcua said. "So, while we should keep our eye on what's happening with the FTC final rule, there are other statutes out there that exist now, which are important to be thinking about."

Graphic listing requirements of the FTC's Click to Cancel rule.

Comparing the list of states with Click to Cancel laws to last month's U.S. presidential election map, it represents a bipartisan mix of red and blue. But President-elect Donald Trump has appointed Andrew Ferguson to replace FTC Chair Lina Khan. Ferguson, who does not need to be confirmed because he is already one of five sitting FTC commissioners, voted against the final Click to Cancel rule that passed 3-2 on Oct. 16 with a Democratic majority voting for it.

Trump also nominated Republican antitrust hawk and attorney Mark Meador to be an FTC commissioner. That would create a Republican majority of commissioners if he is confirmed to replace Khan in her commissioner role.

Momentum builds for consumer protections

Big companies are under scrutiny from both sides of the American political divide. On one hand, Khan has teamed up with other federal agencies to clean up customer service and marketing practices.

On the other hand, anyone who watched conservative firebrand Sen. Josh Hawley (R-Mo.) absolutely excoriate airline CEOs before a U.S. Senate panel last week regarding bounties paid to employees for catching passengers' oversized bags -- and thus generating costly baggage fees -- understands that CX is under a bipartisan microscope right now. Click to Cancel is just one slice of a much bigger pie.

"Nobody enjoys flying on your airlines. It's a disaster," Hawley said. "We are going to do something about it."

It's not clear what the future will be for federal Click to Cancel regulations. The new FTC chair could rescind it, or let it stand. Congress could vote to overturn it. The president could choose not to defend legal challenges. But judging from the breadth of individual states that have made their own laws, CX teams had better get their processes into compliance -- because the idea doesn't appear to be going away anytime soon.

Planning Click to Cancel compliance now, even if it requires some imagination and reengineering of time, technology and processes, is a good first step, Amezcua said. Some states have good-faith clauses that might not necessarily serve as a complete defense for noncompliance, but it can help with the regulatory process.

"I appreciate the point that it could take a very long time and a number of resources [to get into compliance]," Amezcua said. "But you can start by saying, 'OK, there are the 14 things we need to change here.' At least start doing those, iteratively, as soon as you can."

Don Fluckinger is a senior news writer for TechTarget Editorial. He covers customer experience, digital experience management and end-user computing. Got a tip? Email him.

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