The FTC rule that was supposed to end impossible cancellations, vacated, not dead
In October 2024, the FTC finalized a rule requiring every company offering a subscription to make canceling it at least as easy as signing up, no phone-only cancellation, no hidden retention maze, penalties up to $51,744 per violation. In July 2025, the Eighth Circuit Court of Appeals vacated the rule entirely, not because the protection was wrong, but because the FTC's own rulemaking process violated federal procedural law. What most coverage of the vacatur leaves out: the FTC never stopped enforcing the same core protection through a different legal tool, is actively suing companies under it right now, and formally began reviving the rule itself in early 2026. Roughly 30 states also have their own automatic-renewal laws that were never touched by any of this.
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Get the dossier: $7 instant download →The FTC's amended Negative Option Rule, commonly called Click-to-Cancel, applied to virtually any recurring charge: streaming subscriptions, gym memberships, subscription boxes, and free trials that convert to paid plans. Its core requirement was simple to state and expensive to violate: if a customer could sign up online in a couple of clicks, they had to be able to cancel online in a comparable number of steps, no forced phone call, no mandatory retention agent, no cancellation page buried behind a maze of confirmation screens.
The Eighth Circuit's July 2025 ruling in Custom Communications, Inc. v. FTC vacated the rule on Administrative Procedure Act grounds, finding the FTC's rulemaking process itself was procedurally defective. The court did not rule that requiring easy cancellation was unlawful or improper. That distinction matters, because the FTC has continued pursuing the same underlying protection using a different legal authority, the Restore Online Shoppers' Confidence Act, which has governed deceptive negative-option practices since well before the 2024 rule existed. In January 2026, the FTC filed a new enforcement action against a company under exactly that authority.
On January 30, 2026, the FTC submitted a draft Advance Notice of Proposed Rulemaking to formally restart the process of writing a new version of the rule, one built to survive the procedural objections that killed the first attempt. This is a real, ongoing federal rulemaking process, not a hope or a rumor.
This establishes that a federal rule requiring easy subscription cancellation was finalized, then vacated on procedural rather than substantive grounds, that the FTC has continued enforcing the same core protection through separate legal authority in the meantime, and that a formal process to revive the rule is actively underway as of this writing. This is confirmed by the FTC's own public rule history and the Eighth Circuit's published decision.
What this does not establish is that every subscription company is currently required by federal rule to offer easy online cancellation. As of this writing, no federal rule with that specific requirement is in force. Roughly 30 states have their own automatic-renewal statutes that remain fully valid regardless of the federal rule's status, and some are stricter than the vacated rule was.
Rule: Negative Option Rule (Click-to-Cancel), Federal Trade Commission. Finalized October 16, 2024.
Case: Custom Communications, Inc. v. FTC, Eighth Circuit Court of Appeals. Decided July 8, 2025.
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