FTC Cracks Down on Sneaky Subscriptions: No More Auto-Charge Nightmares?
Published Date: 3/13/2026
Proposed Rule
Summary
The FTC wants to update rules about 'negative option' plans—those sneaky deals where you get charged unless you say no. They’re asking for ideas to help people avoid unwanted charges and make canceling easier. If you’re a business or shopper dealing with subscriptions or automatic payments, speak up by April 13, 2026!
Analyzed Economic Effects
8 provisions identified: 7 benefits, 1 costs, 0 mixed.
Online Sales Must Get Express Consent (ROSCA)
Under the Restore Online Shoppers' Confidence Act (ROSCA), sellers who sell online may not charge a consumer through a negative option unless they disclose all material terms before getting the consumer's billing information, obtain the consumer's express informed consent, and provide a simple way to stop recurring charges.
Vacated 2024 Amendments Would Have Required Consent, Disclosures, Cancel Rights
The FTC's 2024 amended Negative Option Rule (which had an effective date of January 14, 2025 and deferred compliance dates extended to July 14, 2025) would have (1) prohibited misrepresentations in negative option marketing, (2) required clear disclosure of material terms before obtaining billing information, (3) required obtaining consumers' express informed consent before charging, and (4) required a simple cancellation method to immediately stop charges; a court vacated that amended Rule in July 2025.
FTC Asks for Comments by April 13, 2026
The FTC is asking the public for ideas about changing the Negative Option Rule to help people avoid unwanted recurring charges and make cancelling easier. Anyone affected by subscriptions or automatic payments can submit comments online or by mail, and the agency must receive comments by April 13, 2026.
Current Rule Only Covers Old 'Prenotification' Plans
The existing FTC Negative Option Rule applies only to prenotification plans (like product-of-the-month clubs) and does not cover continuity plans, automatic renewals, or free-to-pay trial conversions. The Rule therefore does not reach many modern subscription practices.
Debit/Bank Charges Need Written Authorization (EFTA)
The Electronic Fund Transfer Act (EFTA) prohibits sellers from imposing recurring charges on a consumer's debit card or bank account without written authorization. The FTC enforces these requirements and can seek remedies for violations.
1973 Rule (Reinstated) Requires Seven Disclosures, 10-Day Rejection
The reinstated 1973 Negative Option Rule requires prenotification-plan sellers to clearly disclose seven material terms before subscription, including how to decline selections, minimum purchase obligations, cancellation rights, whether billing includes postage and handling, that subscribers have at least ten days to reject a selection, and the frequency of announcements. Sellers must also follow specified procedural timing and honor written cancellation requests promptly.
Phone Offers Must Disclose Steps To Avoid Charges
The Telemarketing Sales Rule requires telemarketers to disclose all material terms of any negative option offer over the phone, including that affirmative action is needed to avoid charges, the date(s) charges will be submitted, and the steps a customer must take to avoid those charges. It also bars certain payment methods often used in deceptive telemarketing.
Postal Rule: Unordered Mailings Are Unfair
Under the Postal Reorganization Act (the Unordered Merchandise Statute), mailing unordered merchandise or a bill for unordered merchandise is treated as an unfair trade practice and subject to FTC enforcement and remedies under section 5 of the FTC Act.
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Key Dates
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