consumer-rights

Subscription Cancellation Rights Under the FTC Negative Option Rule

Difficulty Easy Risk Low Applies To All Potential Savings $100 - $1,000+/year in unwanted recurring charges Last Verified 2026-03-15

Subscription Cancellation Rights Under the FTC Negative Option Rule

What Is It?

Companies that sell subscriptions — streaming services, gym memberships, software, box subscriptions, and thousands of others — must make it as easy to cancel as it was to sign up. The FTC’s updated Negative Option Rule, which took full effect in 2025, closes the loopholes that companies used to trap consumers in unwanted subscriptions through confusing cancellation processes.

If a company lets you sign up with one click online, they cannot legally require you to call, wait on hold, or jump through other hoops to cancel.

How It Works

  1. Know your rights under the rule. Companies subject to the FTC Negative Option Rule must:
    • Obtain your express informed consent before charging you for a subscription
    • Provide a simple mechanism to cancel that is at least as easy as the method used to sign up
    • Immediately honor cancellation requests without attempting to talk you out of it first (they may make one retention offer, but cannot block or delay cancellation)
    • Stop charging you after you cancel
  2. Attempt cancellation through the company’s process first. Use the cancellation method described in the company’s terms. Document everything: screenshots of the cancellation flow, emails confirming your request, date and time.
  3. If the company obstructs cancellation, send a written demand. Address it to the company’s customer service or legal department and state:
    • Your account information
    • The date you first requested cancellation
    • That you are invoking your rights under the FTC Negative Option Rule (16 CFR Part 425)
    • A demand that all charges cease immediately and that any charges after your cancellation request be refunded
    • A deadline (10 business days is reasonable)
  4. File an FTC complaint. If the company refuses, file a complaint at ReportFraud.ftc.gov. The FTC treats complaints as intelligence for enforcement actions, and companies that receive large volumes of complaints for the same conduct face real regulatory risk.
  5. Dispute charges with your bank. If the company continues charging you after a documented cancellation request, dispute the charges with your credit or debit card issuer as unauthorized recurring charges.

What Most People Don’t Know

  • State auto-renewal laws often go further. California (Bus. & Prof. Code § 17600), New York (General Obligations Law § 5-903), and many other states have their own auto-renewal and subscription cancellation statutes with specific disclosure and cancellation requirements that may be stricter than federal rules.
  • “Negative option” means you pay unless you act. The rule covers any offer where inaction results in a charge — including free trials that convert to paid, automatic renewals, and continuity programs (monthly shipments of products).
  • You can dispute charges retroactively. If you cancelled but the company kept charging you, each post-cancellation charge may be disputable as an unauthorized transaction under the FCBA (credit) or Regulation E (debit).
  • The updated 2025 rule is significantly stronger than the original. The FTC’s 2024 update (effective 2025) added the “click-to-cancel” requirement, specifically requiring that cancellation be no harder than sign-up.

Who Benefits Most?

Anyone who has struggled to cancel a subscription — streaming service, software, gym, meal kit, or any other recurring-charge product. This is especially useful for consumers dealing with companies that make cancellation difficult by design.

  • FTC Negative Option Rule (16 CFR Part 425) — Prohibits deceptive practices in negative option marketing; updated in 2024 to add disclosure, consent, and simple cancellation requirements.
  • FTC Act § 5 (15 U.S.C. § 45) — Prohibits unfair or deceptive acts or practices in commerce; applies to subscription traps and dark patterns.
  • California Business & Professions Code §§ 17600–17606 — Strong state-level auto-renewal law requiring affirmative consent and easy cancellation.
  • New York General Obligations Law § 5-903 — Requires advance notice before automatic renewal of certain contracts.

Frequently Asked Questions

Does the FTC’s click-to-cancel rule require companies to let me cancel with a single click?

The rule requires that cancellation be at least as easy as sign-up — so if you signed up online with a few clicks, the company must offer an online cancellation method. It does not mandate a literal single-click button, but it prohibits multi-step obstacles, mandatory retention calls, and forcing online sign-up customers to cancel by phone. Note: the 8th Circuit vacated portions of the 2024 rule in July 2025, and the FTC has reopened rulemaking, so the strongest provisions remain subject to litigation.

What should I do if a company keeps charging me after I cancelled?

Document everything — screenshot your cancellation confirmation, save your email receipts, and note the date. Dispute each post-cancellation charge with your credit or debit card issuer as an unauthorized recurring charge. Also file a complaint with the FTC at ReportFraud.ftc.gov. If you cancelled in writing and the company cannot prove otherwise, each continued charge is disputable under the FCBA (credit) or Regulation E (debit).

A free trial automatically converted to a paid subscription and I didn’t realize it. Can I get a refund?

Possibly. Under the FTC Negative Option Rule, companies must obtain your express informed consent before charging you for a subscription following a free trial, and must clearly disclose when the trial ends and what you’ll be charged. If these disclosures weren’t clear, file complaints with the FTC and your state attorney general, and dispute the charges with your card issuer as unauthorized.

Can companies legally make me call to cancel if I signed up online?

Under the FTC’s rule, no — if you signed up online, the cancellation method must be available online. However, enforcement of this specific requirement is in flux due to ongoing litigation. Practically, if a company refuses online cancellation, document your attempts, send a written cancellation demand by email or certified mail, and file a CFPB or FTC complaint. Written documentation of your cancellation request is your strongest tool for a chargeback.

Do state laws give me stronger cancellation rights than the FTC rule?

Often yes. California (Bus. & Prof. Code §§ 17600–17606) and New York (General Obligations Law § 5-903) have strong auto-renewal laws with specific disclosure and cancellation requirements that apply independently of federal rules. If you’re in one of these states and a company violated the auto-renewal disclosure requirements, you may be entitled to a full refund of all charges under state law.

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