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

The FTC took another shot at deceptive auto-renewal subscription practices, but on 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 may leave more consumers vulnerable to existing subscription traps.

If you believe you’ve been misled by deceptive auto-renewal practices ,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.

What Are Click-to-Cancel Laws?

Click-to-cancel laws mandate that companies offering online subscriptions must provide a simple and straightforward way for consumers to cancel electronically. Instead of requiring long, difficult phone calls with customer service, businesses must offer a cancellation process that mirrors the ease of signing up.

The Federal Trade Commission (FTC) has long considered unfair cancellation practices to be unlawful. In 2023, the FTC proposed updates to its Negative Option Rule to strengthen requirements for online subscriptions, ensuring that consumers can cancel with one click or a similarly simple method.

States such as California and New York have already passed laws requiring clear, accessible cancellation options for subscription-based services.

The FTC’s latest “click-to-cancel” rule meant to eliminate unfair subscription practices by mandating express affirmative consent from consumers and simplifying cancellation processes. But 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.

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?

California’s Automatic Renewal 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” before charging, and retaining proof for three years or one year post-termination, whichever is longer.

The law also 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.

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.

Can You File a Class Action Automatic Renewal Lawsuit?

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, including:

• 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.

Why Hire The Lyon Firm for Consumer Fraud Cases?

taking on corporations that rely on unlawful subscription traps, our firm fights to return money to consumers and to reform predatory business practices. Call now for afree and confidential consultation.