“Click-to-Cancel Rule for Easier Subscription Cancellation Blocked”

A recent ruling has blocked a proposed “click-to-cancel” rule that was aiming to make it easier for consumers to cancel unwanted subscriptions and memberships. The rule, put forth by the Federal Trade Commission in October, required businesses to get a customer’s consent before charging for memberships, auto-renewals, and programs tied to free trial offers. They also had to disclose when free trials or promotions would end and make it just as simple to cancel subscriptions as it was to start them.

The FTC’s proposal was included in President Joe Biden’s “Time is Money” initiative, a comprehensive effort to eliminate consumer-related headaches. However, the rule hit a roadblock when the U.S. Court of Appeals for the Eighth Circuit found that the FTC had failed to conduct a necessary preliminary regulatory analysis for rules impacting the economy over $100 million. Even though the FTC initially thought the rule wouldn’t surpass that threshold, an administrative judge disagreed, leading to the rule being vacated.

While the court doesn’t support unfair marketing practices, they felt the flaws in the FTC’s rulemaking process were too significant to overlook. The FTC has chosen not to comment on the matter at this time.

Despite this setback, the FTC is gearing up for a trial involving Amazon’s Prime program. The trial stems from a lawsuit filed by the FTC accusing Amazon of enrolling consumers in Prime without their consent and making it challenging for them to cancel. The trial is expected to occur next year.