U.S. appeals court blocks FTC’s ‘click-to-cancel’ rule for recurring subscriptions
U.S. Court of Appeals struck down the rule entirely, just days before it was scheduled to take full effect on July 14. Now that the FTC isn’t making a large, sweeping ruling, laws will go into the hands of individual states.
What Happened?
On October 16th, 2024: The Federal Trade Commission, which aims to protects America's consumers, announced the "Click-to-Cancel" rule.
The rule was designed to make it easier for consumers to cancel subscriptions. You can read Churnkey's explanation of the rule here.
On July 8th, 2025: U.S. Court of Appeals struck down the rule entirely, just days before it was scheduled to take full effect on July 14.
Why Was It Struck Down?
Multiple organizations challenged the FTC's rule in court. This included various business groups including the U.S. Chamber of Commerce, alarm companies, press associations, advertising bureaus, and other industry groups.
The court ruled on procedural grounds.
Federal law required a preliminary economic analysis to determine if the negative option rule would cost businesses more than $100M a year. The FTC did not to conduct the analysis and so the court blocked the rule.
What Does This Mean For Businesses?
Now that the FTC isn’t making a large, sweeping ruling, laws will go into the hands of individual states.
If you serve customers who are in the U.S., you will have to comply with each one of the individual states. Many of these laws are inconsistent with one another.
This could make things more complicated for to manage, especially if you're serving customers in multiple jurisdictions.
When Does Your Business Need to Be Compliant?
- 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.
27 states already have their own laws for subscription cancellations or renewals.
How Can Churnkey Help?
At Churnkey, we understand how complicated this could mean for businesses and we’ve built a solution that makes compliance across jurisdictions effortless.
Cancel Flow compliance happens in mere clicks within your Churnkey dashboard. It’s up to you to decide how you’d like to comply with the various cancellation laws out there:
- Comply with “single-click” laws only in relevant jurisdictions, or…
- …also elect to be “maximally-compliant” in all US states
We've designed Churnkey to respect your customer, and this is yet another step in that direction.
How To Get Started With Churnkey?
Churnkey helps high-volume subscription companies recover 20-40% of the revenue that they would otherwise have lost to churn.
We have a suite of retention products ranging from:
- Cancel Flows
- Payment Recovery
- Customer Health
- Reactivations
- Feedback AI
- ...and more to help you tackle churn in the most efficient way.
To get started, book a call or sign up for an account. If you have questions about your existing flow, please ask our team.
