A U.S. appeals court has put a halt to the Federal Trade Commission’s “click-to-cancel” rule, which aimed to make it easier for consumers to cancel subscriptions. The rule, scheduled to go into effect on July 14, required companies to offer a simple cancellation process similar to the ease of signing up.
According to Reuters, the 8th U.S. Circuit Court of Appeals in St. Louis ruled that the FTC, led by former Democratic Chair Lina Khan, did not properly analyze the costs and benefits of the rule before implementing it.
Under the now-blocked regulation, businesses would have been obligated to provide cancellation options that mirror the sign-up process. This means that if subscribing to a service only required a few clicks, canceling it should be just as straightforward, without any unnecessary hurdles like navigating through multiple web pages or interacting with chatbots.
Furthermore, the rule would have mandated that companies obtain customer consent before charging for memberships, auto-renewals, or programs associated with free trials.
