FTC pushes the enforcement of its ‘click-to-cancel’ rule back to July

The Federal Trade Commission has delayed the start of a rule that aims to make the process of canceling subscriptions less of a nightmare. Last year, the FTC voted to ratify amendments to a regulation known as the Negative Option Rule, adding a new “click-to-cancel” rule that requires companies to be upfront about the terms of subscription signups and prohibits them “from making it any more difficult for consumers to cancel than it was to sign up.” Surprising no one, telecom companies were not happy, and sued the FTC. While the rule was nevertheless set to be implemented on May 14, the FTC now says enforcement has been pushed back 60 days to July 14.

Some parts of the updated Negative Option Rule went into effect on January 19, but the enforcement of certain provisions were deferred to May 14 by the previous administration to give companies more time to comply. Under the new administration, the FTC says it has “conducted a fresh assessment of the burdens that forcing compliance by this date would impose” and decided it “insufficiently accounted for the complexity of compliance.”

Once the July 14 deadline hits, the FTC says “regulated entities must be in compliance with the whole of the Rule because the Commission will begin enforcing it.” But, the statement adds, “if that enforcement experience exposes problems with the Rule, the Commission is open to amending” it.