You run a subscription-based business — maybe it’s a membership platform, a training academy, a delivery service, or digital tools. You’ve worked hard to get your customers in the door. But imagine losing that trust — and possibly your reputation — because someone couldn’t find the cancel button. That’s what the Federal Trade Commission (FTC) is targeting with its new Click to Cancel Rule.
As a merchant relying on recurring subscriptions, your billing process needs to meet the latest legal standards — or risk penalties, refunds, and chargebacks.
Let’s break down what this rule means for you, what steps you must take, and how ECS Payments can help you build FTC-compliant recurring billing systems without disrupting your business model.
What Is the Click to Cancel Rule?
The Click to Cancel Rule is an update to the FTC’s Negative Option Rule — a set of guidelines designed to prevent deceptive billing practices in subscription services, free trials, and automatic renewals.
Finalized in 2024 and set to take effect in 2025, this rule mandates that any consumer who signs up for a recurring subscription online must be able to cancel their subscriptions online — quickly, clearly, and without jumping through hoops.
The rule requires that merchants provide a simple cancellation mechanism equal in ease to the signup process. That means if a customer enrolled via two clicks, they should be able to cancel in two clicks — not ten steps and a phone call.
“This rule requires sellers to make it as easy for consumers to cancel their enrollment as it was to sign up,” said FTC Chair Lina Khan in the agency’s official press release.
Why The Click to Cancel Rules Matter for Merchants
From SaaS companies to digital services to fitness training, merchants across all industries are impacted. The rule doesn’t just affect large corporations; it applies to any business using recurring charges, negative option programs, or subscription practices that renew automatically unless canceled.
Penalties For Non-Compliance
Compliance isn’t optional. Merchants who fail to follow the Click to Cancel Law 2025 face significant consequences, including civil penalties of up to $50,120 per violation, mandatory consumer refunds, and even full-scale federal enforcement actions from the Federal Trade Commission (FTC).
If your cancellation flow is deemed deceptive or overly complicated, you could also face lawsuits or consent decrees. Beyond the legal risks, non-compliance damages customer relationships — making clients less likely to trust your subscription services or return after canceling.
Best Practices for Transparent Billing
To avoid these consequences and keep your business safe from financial and reputation consequences, here’s what every merchant should implement to remain compliant:
Online Cancellation Must Be Simple
If you offer subscriptions online, your cancellation process must be just as straightforward. A clearly labeled click to cancel button should be visible on your customer dashboard or billing page. You should ensure you have a self-service option for customers to choose to cancel rather than making them go through hoops to call customer support.
Consent Must Be Clear
Before you charge a customer at the end of a free trial or discount period, the FTC subscription law requires you to obtain a consumer’s affirmative consent. That means no pre-checked boxes or sneaky small print.
Customers Must Be Reminded
For subscriptions that renew annually, you must send a clear reminder in advance. This reminder could be an email notification or sms, whatever the method of reminder, it gives users time to evaluate the service and cancel if they choose.
Deceptive UX Patterns Are Out
So-called “dark patterns” — such as hiding the cancel option, using confusing language, or creating friction in the exit flow — violate the final rule and may lead to investigations.
How ECS Payments Helps Merchants Stay Compliant
If your business is using automatic renewals or recurring payment models, it’s critical to ensure your billing system is secure, reliable, and aligned with the new FTC mandate.
ECS Payments helps merchants implement PCI-compliant, encrypted recurring billing solutions that prioritize both compliance and consumer trust. Our recurring billing solutions use vaulted virtual terminals, tokenization, and end-to-end encryption to securely store and process sensitive payment information. This not only helps protect your customers but also positions your business to avoid fraud, reduce chargebacks, and meet stringent data handling requirements.
Why The Click to Cancel Rule is Actually a Growth Opportunity
Yes, FTC click to cancel regulations may sound restrictive — but for forward-thinking businesses, they present a chance to stand out. Transparency builds trust, and trust leads to retention.
According to Pew Research, 76% of Americans believe there should be more government regulation to protect consumer rights online. Though forced by law, removing barriers in your cancellation processes shows customers that their time and money are respected — and that they’re free to leave, but welcome to stay.
Customers who feel in control are more likely to recommend your brand. They’ll remember you not for how hard it was to leave, but how easy it was to come back.
What Merchants Should Do Now
If you haven’t already, here’s how to get ahead of the 2025 Click to Cancel Law deadline:
- Audit your billing systems. How easy is it to cancel? Could a new customer find the option within seconds?
- Train your staff. Everyone from developers to customer support should understand what the rule requires.
- Work with ECS. Let us upgrade your subscription platform, ensure regulatory readiness, and build trust through transparency.
- Review your disclosures. Make sure your subscription practices include clear, visible explanations of renewal terms and cancellation options.
Final Word: Click to Cancel is Just the Beginning
This rule marks a shift in how subscriptions work across the United States. As more regulations like the FTC subscription law take hold, your recurring subscription platform must evolve — from how you collect payment information to how you cancel a good or service.
ECS helps you stay one step ahead — not just with ECS recurring billing compliance, but with tools designed for real businesses like yours.
Get started today at ECS Payments and let’s build subscription systems that drive growth, not friction.
