The U.S. Court of Appeals for the 8th Circuit vacated the Federal Trade Commission's (FTC) highly anticipated "click-to-cancel" rule on Tuesday after the court found that the commission had not followed proper procedures in setting the regulations.
The commission announced its notice of proposed rule making in March 2023 to rescue consumers "from seemingly never-ending struggles to cancel unwanted subscription payment plans for everything from cosmetics to newspapers to gym memberships." For example, the popular Gold's Gym usually requires a 30-day notice of cancellation, according to Rocket Money, an expense-tracking app. The proposed rule would have required businesses offering simple online signups to offer equally straightforward online cancellations. It would have also mandated asking consumers whether they want to hear pitch offers before canceling their subscriptions and annual reminders before renewing subscriptions for all non-physical goods.
The proposal garnered over 16,000 comments from consumers, trade associations, and government agencies, which prompted the FTC to exclude the latter two requirements from the final rule, which the Biden administration-era FTC billed as making "it as easy for consumers to cancel their enrollment as it was to sign up."
