FTC Proposes Automatic Renewal Rule

On March 23, The Federal Trade Commission (FTC) announced a Notice of Proposed Rulemaking regarding changes to automatic renewal provisions for companies offering subscriptions and recurring payments. A “click to cancel” provision is one of several updates being proposed as part of the FTC’s ongoing review of its 1973 Negative Option Rule, which traditionally covered “book of the month” type offers. Other proposed changes include new requirements before making what are commonly referred to as “save the sale” offers during cancellation, as well as regarding reminders and confirmations. Companies that violate the updates would be subject to civil penalties from the FTC. Once the notice has been published in the Federal Register, there will be a sixty-day comment period.

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