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FTC Final Click-to-Cancel Rule: Implications for Subscription Contracts, Autorenewals, and Other Negative Option Offers

Recording of a 90-minute CLE video webinar with Q&A

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Conducted on Tuesday, January 14, 2025

Recorded event now available

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This CLE webinar will discuss the FTC's final “Click-to-Cancel” rule and its significant impact on subscriptions. The panel will explore the scope of this new rule, its requirements, and the legal obligations and risks businesses need to be aware of to ensure compliance and avoid FTC scrutiny.

Description

On Oct. 16, 2024, the FTC finalized its Click-to-Cancel rule, which imposes a variety of requirements on sellers of goods or services with a so-called "negative option" feature under which the seller interprets a customer's silence or failure to affirmatively take action to cancel as acceptance of the offer. If upheld, the rule will significantly impact the sign-up and cancellation procedures for subscription services.

The new rule requires businesses to offer a cancellation mechanism that is as easy to use as the method the consumer used to subscribe. Businesses must also provide clear and conspicuous disclosures about the terms of the subscription, including how to find the cancellation mechanism, and obtain express informed consent from consumers before charging them.

Violations of the Click-to-Cancel rule can have significant consequences, including consumer redress and civil monetary penalties of more than $50,000 per violation. Companies that offer subscription-based services and contracts should review their current practices and procedures for compliance.

Listen as our expert panel delves into the details of the FTC's final Click-to-Cancel rule, its implications for businesses, and practical steps for compliance.

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Outline

  1. Overview of Click-to-Cancel rule
    1. Impact of new administration
    2. Updates on legal challenges
    3. Relationship to state laws
  2. Scope and applicability of the rule
    1. Consumer contracts
    2. Business-to-business contracts
  3.  Key provisions of the rule (and comparison to state law requirements)
    1. Clear and conspicuous material disclosures
    2. Affirmative consent
    3. Confirmation/Acknowledgement
    4. Renewal reminders
    5. Notices of Material/Fee Changes
    6. Simplified cancellation process
    7. Misrepresentation prevention
    8. Enforcement mechanisms
  4. Penalties for violations of Click-to-Cancel
  5. Actions businesses should take now
    1. Reviewing and updating current practices
    2. Enhancing disclosure and consent processes
    3. Simplifying cancellation procedures
    4. Training staff on compliance requirements
  6. Key takeaways

Benefits

The panel will review these and other key issues:

  • Key provisions of the FTC's Click-to-Cancel rule
  • Whether Click-to-Cancel preempts more stringent state laws
  • Contractual obligations and compliance; ensuring clear disclosures, consent, and easy cancellation
  • Legal risks and penalties for noncompliance
  • Practical steps for businesses to align current practices with the new rule

Faculty

Jaeger, Michael
Michael Jaeger

Counsel
Mayer Brown

Mr. Jaeger represents clients in class actions and complex litigation in state and federal courts across the...  |  Read More

Remick, Alexandra
Alexandra (Ali) Remick

Associate
Covington & Burling

Ms. Remick is a member of the Advertising and Consumer Protection Investigations Group. Her practice focuses on...  |  Read More

Singer, Paul
Paul L. Singer

Partner
Kelley Drye & Warren

Mr. Singer spent over two decades in the Texas Attorney General’s office, spearheading its consumer protection,...  |  Read More

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