The End of the FTC's 'Click-to-Cancel' Rule: What SaaS Companies Need to Know Now

On July 8, 2025, just days before it was set to take effect, a U.S. appeals court blocked the FTC's 'Click-to-Cancel' rule. While this means the federal rule is no longer active, the regulatory landscape for subscription businesses has not simplified. Instead, the focus has shifted to a patchwork of individual state laws. This post has been updated to reflect this major development and provide guidance on navigating the current environment.

If your business offers subscription services, there’s a new regulation you need to be aware of: the Federal Trade Commission’s (FTC) "Click-to-Cancel" rule. This rule is designed to protect consumers by making it easier to cancel subscriptions, and it places new requirements on businesses to simplify their cancellation processes.

Here’s what you need to know about the new rule, why it matters, and how to ensure your business is compliant before the rule comes into full effect.

What Is the FTC’s "Click-to-Cancel" Rule?

The FTC’s "Click-to-Cancel" rule was an initiative aimed at eliminating complicated, hidden, or difficult-to-navigate subscription cancellation processes. The rule would require businesses to make it just as easy for consumers to cancel a subscription as it was to sign up. This means no more forcing customers to jump through hoops, interact with representatives, or dig through dark UX patterns to cancel a service.

The FTC’s goal is to enhance consumer protections and provide more transparency, so consumers can manage their subscriptions without frustration or confusion. The court, however, struck down the rule on procedural grounds, citing the FTC's failure to conduct a preliminary economic analysis required for rules with an expected impact of over $100 million annually. This means the federal rule, as written, will not be enforced.

Why Does This Matter?

This development means the regulatory landscape has become more complex. Instead of one federal rule, businesses must now navigate a growing number of individual state laws that often have similar, but inconsistent, requirements. Failing to comply with these state-specific regulations could still lead to fines and legal action. The core principle — that an easy cancellation process builds customer trust — remains as important as ever, regardless of the legal framework.

When Does Your Business Need to Be Compliant?

While the federal rule is no longer a concern, businesses must comply with state-level regulations. Many states have their own laws, and more are being added. For example…

• California’s “Auto Renewal Law” took effect on July 1
• Colorado’s cancellation law goes into effect on August 6
• New York’s amended law goes into effect November 5.
• ...and so on.

This state-by-state approach makes it critical for businesses to understand the specific laws in the jurisdictions where their customers reside.

How Can Your Business Become Compliant?

With the federal rule blocked, the focus shifts to complying with state laws and adopting best practices. Many of the requirements the FTC's rule would have imposed are reflected in state laws. Here’s what businesses should focus on to ensure they are compliant across multiple jurisdictions:

1. Easy-to-Find Cancellation Option
   The cancellation option should be clear and easy for customers to locate. It should be just as visible as the sign-up mechanism.
2. No Need for Live Representatives
   For most businesses, this means no more mandatory phone calls or chatbot interactions just to stop a subscription.
3. Immediate Processing
   Cancellations need to be processed promptly, ensuring there’s no unnecessary delay once the consumer makes the request.
4. Symmetry Between Sign-Up and Cancellation
   The cancellation process must be as simple as signing up for the service. If it takes 1 minute to subscribe, it shouldn’t take 5 minutes to cancel.

How Can Churnkey Help?

At Churnkey, we understand how crucial this shift is for businesses, and we’ve built a solution that makes compliance with a patchwork of state laws effortless. Here’s how we can help:

1. Simple, One-Click Cancellation Flows
   Our Cancel Flows are designed to be user-friendly and accessible. We integrate directly into your website or app, ensuring customers can find the cancellation option quickly and easily — fully compliant with the new regulations.
2. Self-Serve Cancellations
   No more interactions with customer service or chatbots. Churnkey allows subscribers to cancel their service independently, just as easily as they signed up.
3. Instant Processing
   Churnkey’s automated system ensures that cancellation requests are processed immediately, meeting the FTC’s promptness requirements and providing a smooth experience for customers.
4. Symmetry with Sign-Up
   We ensure the cancellation experience mirrors your sign-up flow, so it’s just as easy and straightforward, keeping your business aligned with the FTC's rules.
5. Compliance-Ready Data Capture
   Churnkey captures detailed data on how and when cancellations are served and processed, ensuring you can meet any compliance obligations with a clear audit trail.

Get Started with Churnkey Today

Navigating the complex landscape of state-specific subscription cancellation laws is essential for protecting your business and maintaining consumer trust. But it doesn’t have to be a headache. With Churnkey’s Cancel Flows, you can easily meet the requirements across multiple jurisdictions while also creating a better experience for your customers.

Ready to make compliance simple? Get in touch with us to learn how Churnkey can streamline your cancellation process, boost retention, and keep your business in line with new regulations.