FTC Click-to-Cancel Rule on Hold & Other Auto-Renewal Changes

For years, the legal landscape surrounding subscription services has been focused on thwarting deceptive auto-renewal subscription practices. On Tuesday, July 8, 2025, just days before its planned enforcement date of July 14, 2025, the United States Court of Appeals for the Eighth Circuit struck down the Federal Trade Commission’s (FTC) new “click-to-cancel” rule. This ruling marks a crucial moment in the regulation of automatic renewal practices, potentially leaving more consumers vulnerable to existing subscription traps.

While this appears to be a setback for consumer protection, state laws, such as California’s updated Automatic Renewal Law (ARL) continue to tightly monitor businesses and their auto-renewal practices. If you believe you’ve been misled by deceptive auto-renewal practices—whether by a national brand or a local service—you may consider contacting an experienced attorney to discuss your legal options. Our lawyers have the resources and experience to build a strong case on your behalf and to hold any negligent company accountable for ARL violations.

A Recent Setback for the FTC Click-to-Cancel Rule

The FTC’s “click-to-cancel” rule promised a streamlined way to end recurring charges with a single click. The pending rule meant to eliminate unfair subscription practices by mandating express affirmative consent from consumers and simplifying cancellation processes, but alas, it has been overturned by the courts, who cited procedural flaws. The court found that the FTC bypassed required steps under Section 22 of the FTC Act, including a preliminary regulatory analysis. The judges acknowledged the need to rein in deceptive marketing but deemed the FTC’s process deficient, vacating the rule entirely.

This decision doesn’t end FTC oversight on auto-renewal violations, however. The agency retains authority to penalize unfair business practices under existing laws, which urge businesses to maintain clear disclosures and easy cancellation options.

What is the California Automatic Renewal Law?

With the federal click-to-cancel rule sidelined, state statutes are taking center stage. California’s Automatic Renewal Law, recently amended and effective July 1, 2025, expands protections against deceptive auto-renewals. The state law redefines “automatic renewals” to include free trials that convert to paid subscriptions, a common trap for unsuspecting consumers.

Businesses operating in California must now secure “express affirmative consent”—an undefined but stricter standard—before charging, retaining proof for three years or one year post-termination, whichever is longer.

The law also tightens cancellation rules, requiring that the methods match the original transaction medium (e.g., online sign-ups must offer online cancellation). It bans misleading practices and mandates annual renewal reminders and 7-30 day notices for fee changes. All reminders and notices must be delivered via the consumer’s preferred channel. Discounts or retention offers are allowed, but only with a prominent “click to cancel” option displayed alongside.

Massachusetts is slated to follow suit with a new rule effective September 2, 2025, mirroring the FTC’s junk fee and cancellation principles.

If you’ve been deceived into a subscription due to hidden renewals or unclear terms, you might have legal grounds to challenge the company and recoup financial losses that may have accumulated for months or years. Misleading subscription claims—such as promises of easy cancellation that don’t materialize—could violate state laws or existing FTC guidelines. When businesses violate existing FTC regulations or the California ARL laws, potential class action claims may include:

• Refund of Unauthorized Charges: Recover money paid due to hidden renewals.
• Damages for Misrepresentation: Compensation for financial loss or distress from false promises.
• Injunctive Relief: Pushing for policy changes to protect others.

Eligible plaintiffs might include anyone who has signed up for a subscription—gym memberships, streaming services, or online magazine subscriptions—only to face convoluted cancellation processes or unexpected, hidden charges.

Can You File a Class Action Automatic Renewal Lawsuit?

Whether a company violates California’s ARL or the FTC’s regulations, consumers have rights that can be exercised. We believe strongly that consumers should have clear instructions on how to cancel a subscription. There have been several notable auto-renewal deceptive marketing lawsuits, reflecting growing consumer frustration with subscription practices. These cases target companies allegedly misleading consumers about automatic renewals, hidden fees, or difficult cancellation processes.

• Noom Inc. ($62 Million Settlement, 2022): A class action lawsuit alleged that the weight-loss app misled users with “risk-free” trial periods that automatically converted to costly subscriptions, with cancellation made difficult through barriers like requiring interaction with a virtual coach.
• NordVPN: Filed in a Colorado federal court in November 2024, this lawsuit claims NordVPN and its parent company used deceptive auto-renewal practices, hiding terms in fine print and complicating cancellations.
• Amazon (2022 Class Action): Consumers filed a lawsuit claiming Amazon charged for monthly or annual subscriptions, including enrolling individuals in Prime memberships without consent. The case highlights difficulties in cancellation, with an ongoing FTC lawsuit reinforcing these concerns.
• eHarmony Inc. ($2.2 Million Settlement, 2018): This lawsuit, brought by California district attorneys, claimed eHarmony failed to clearly disclose auto-renewal terms, leading to unauthorized charges.
• Naked Wines Inc. ($650,000 Settlement, 2022): Filed under California’s Automatic Renewal Law, this lawsuit alleged Naked Wines violated renewal disclosure rules. The settlement included an injunction and financial settlement.

The cases above are just a small sample of the large-scale consumer pushback against auto-renewal schemes, often citing state laws like California’s ARL or federal statutes like the Restore Online Shoppers’ Confidence Act (ROSCA). If you’ve been deceived or impacted, consulting with a legal professional could help explore your options.