FTC seeks public comment on new rules to crack down on subscription ‘negative option’ billing
The agency gets tens of thousands of complaints about the hated practice
The Federal Trade Commission is once again weighing new rules for subscription programs that automatically charge consumers unless they take action to cancel—an increasingly common business practice that regulators say continues to generate tens of thousands of complaints.
In an announcement Thursday, the agency said it is seeking public comment on whether to strengthen or revise its Negative Option Rule, a decades-old regulation governing so-called “prenotification” plans in which consumers are billed unless they decline an offer. The review comes as subscription-based billing—from streaming services to online retail memberships—has become a dominant business model across much of the digital economy.
Negative option marketing allows companies to interpret a consumer’s silence or inaction as consent to be charged for goods or services.
The FTC said the practice can offer benefits, such as uninterrupted service and reduced transaction costs. But regulators say problems arise when companies fail to disclose key terms, enroll consumers without clear consent, or erect obstacles that make cancellation difficult.
“Negative option subscriptions can offer procompetitive features to consumers and the marketplace more broadly by lowering transaction costs and ensuring consumers receive uninterrupted service,” said Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection. “The Commission’s enforcement track record suggests, however, that negative option subscriptions continue to be plagued by difficult cancellation processes, unlawful retention tactics, and a suite of other impediments that prevent consumers from easily switching or ending subscription services.”
What Is a “Negative Option” Subscription?
A negative option program charges consumers unless they actively decline or cancel. Common examples include:
Free trials that convert to paid subscriptions unless canceled before a deadline
Automatic annual renewals for memberships or software
Subscription boxes that ship products regularly unless paused or canceled
Streaming services billed monthly until the user opts out
Consumer advocates say the key issue is whether customers receive clear disclosure and an easy way to cancel—two factors regulators are now examining more closely.
A growing source of consumer complaints
The FTC said it has received more than 100,000 complaints over the past five years about negative option practices and related billing tactics. Consumer advocates say those complaints likely represent only a fraction of the real problem, because many frustrated subscribers simply cancel their credit cards or abandon the service rather than file a formal report.
The issue has grown alongside the explosion of subscription-based services. Consumers today routinely encounter automatic billing for everything from video streaming platforms and meal kits to software, fitness apps, and subscription boxes. Even traditional retailers increasingly rely on membership programs that automatically renew each year unless customers opt out.
Consumer protection groups have long argued that some companies design sign-up processes that are quick and easy while hiding the cancellation button behind multiple screens, phone calls, or confusing account settings.
These practices are sometimes called “dark patterns”—user-interface tricks designed to nudge consumers into choices they might not otherwise make.
The rule under review
The FTC’s current Negative Option Rule dates back decades and was originally designed to regulate mail-order book clubs and similar subscription plans that sent periodic shipments unless customers declined them.
The new Advance Notice of Proposed Rulemaking (ANPRM) marks the early stage of a possible regulatory overhaul. At this stage, the FTC is not proposing specific requirements but instead asking the public, businesses, and researchers to weigh in on whether changes are needed.
Among other things, the agency is requesting information about:
How widespread negative option programs are across different industries and how they operate.
Practices that prevent consumers from understanding terms, such as unclear disclosures or hidden fees.
Enrollment without informed consent, including situations where consumers are automatically signed up for paid subscriptions after free trials.
Barriers to cancellation, including complicated procedures or aggressive retention tactics.
Possible solutions, ranging from updating the rule to consumer education campaigns or other regulatory alternatives.
The FTC is also encouraging commenters to submit market studies, economic data, or empirical research to help inform the rulemaking process.
Past enforcement cases
The agency has already brought numerous enforcement actions related to negative option practices. In recent years, regulators have targeted companies accused of trapping consumers in subscriptions through misleading marketing or by making cancellation extremely difficult.
For example, the FTC has pursued cases involving online retailers, digital subscription services, and even companies selling health products through recurring billing plans. Some cases resulted in multi-million-dollar settlements and refunds to consumers who were charged without clear authorization.
Consumer groups say these enforcement actions illustrate how widespread the issue has become.
“Subscription traps have quietly become one of the most common consumer complaints,” said several advocates in past policy debates over the issue. “Companies make signing up effortless—but leaving can feel like navigating a maze.”
Regulatory whiplash
The FTC previously attempted to address the issue with a sweeping rule adopted in 2024, sometimes referred to as the “click-to-cancel” rule, which sought to require companies to make subscription cancellation as easy as signing up.
But that rule was vacated by a federal court, leaving the agency to reconsider how to regulate the rapidly evolving marketplace. The new ANPRM signals the FTC may try again—this time building a broader record of evidence before proposing new requirements.
The agency specifically asked commenters whether provisions from the now-vacated 2024 rule—or entirely new regulatory approaches—should be considered.
What happens next
Public comments will help determine whether the FTC moves forward with a formal rule proposal. If it does, the process could take months or years and would involve additional rounds of public input before any rule becomes final.
Once the ANPRM has been published in the Federal Register, consumers can submit comments electronically for 30 days. Consumers also may submit comments in writing by following the instructions in the “Supplementary Information” section of the Federal Register notice.
For consumers, the outcome could shape how companies handle automatic renewals, free trials, and subscription cancellations across a wide range of industries.
Until then, regulators continue to advise consumers to review billing terms carefully before signing up for subscription offers and to monitor bank or credit card statements for recurring charges.
“Neither consumers nor competition are protected,” Mufarrige said, “when consumers are enrolled in programs that they either do not want or cannot cancel.”