FTC Finalizes Subscription Renewal Rules

On October 16, 2024, the Federal Trade Commission (“FTC”) finalized a new set of rules aimed at improving consumer protections regarding recurring subscription plans, including those with automatic renewals. The FTC said they are cracking down on misleading practices that could trap consumers into paying for services they no longer need or want. These new rules, which follow extensive public feedback, are designed to help consumers easily cancel subscriptions they no longer want, without being subjected to lengthy or confusing cancellation processes. The new regulations primarily target businesses that use “negative option” programs—where consumers are automatically enrolled in recurring payments unless they actively opt-out. The rules require businesses to clearly disclose the terms of these subscriptions before collecting any payment information and ensure that consent is obtained separately for subscription renewals.