UNITED STATES OF AMERICA 

Federal Trade Commission 

WASHINGTON, D.C. 20580 

Office of the Chair 

Statement of Chair Lina M. Khan 

Joined by Commissioner Rebecca Kelly Slaughter 

and Commissioner Alvaro M. Bedoya 

Regarding the Notice of Proposed Rulemaking on the Negative Option Rule 

Commission File No. P064202 

March 22, 2023 

Today the Commission has voted out a proposal for a much-needed update to the FTC’s 

nearly 50-year-old Negative Option Rule. As the Commission knew when the rule was passed in 

1973, companies too often manipulate consumers into paying for subscriptions for goods and 

services that they don’t want. The problem has only gotten worse. Today, we are proposing to 

not only lay out clear rules of the road for marketing negative option plans, but also to mandate 

that companies make it as easy to cancel as they make it to sign up in the first place. 

Negative option plans refer to any situation where the customer is presumed to continue 

to accept an agreement or offer unless they affirmatively decline it. This structure can be 

harmless, and can even benefit consumers, when properly disclosed. Problems arise when 

businesses manipulate consumers away from taking that affirmative step, which can result in 

customers paying for things they don’t want or need. Where consumer protection laws are 

inadequate, or inadequately enforced, dishonest companies will keep developing ways to make it 

easier to inadvertently subscribe, and ever harder to cancel, harming consumers and honest 

competitors along the way. 

The original Negative Option Rule addressed what we call “prenotification plans.” These 

are where sellers provide consumers with notice of the product, send the product, and then 

charge for it unless the consumer affirmatively declines. Since then, the Commission has gained 

other authorities to help address deceptive negative options, including the Telemarketing Sales 

Rule and the Restore Online Shoppers’ Confidence Act. The Commission has actively enforced 
these rules and laws, including in over 30 cases from just the past few years.0F

1

 In 2021, we issued 

a policy statement articulating the Commission’s various existing authorities.1F

2 

But these authorities have left major gaps. TSR applies only to telemarketing, ROSCA 

only to online shopping, and the existing Negative Option Rule only to prenotification plans. 

Meanwhile, even as we’ve been busy enforcing these laws, negative option marketing has only 

increased, along with abuses. Some companies are using ever more sophisticated dark patterns to 

thwart consumer efforts to cancel a product or service. Some consumers report thinking they’ve 

successfully canceled, only to find out later that they didn’t notice a nearly invisible button that 

they needed to click in order to finalize their decision. 

Accordingly, today’s proposed rulemaking draws on Section 5’s prohibition against 

unfair or deceptive practices. Specifically, it proposes to amplify ROSCA’s simple-cancellation 

mandate and applies it across the full universe of negative option marketing. As the Commission 

has found in case after case, companies can make it easy to sign up—sometimes inadvertently— 

for an ongoing good or service and make it difficult to leave. Many gyms reportedly require 

members to cancel in person or via certified or notarized mail.2F

3

 You might sign up for a cell 

phone plan online, but to cancel, you have to call an 800 number, wait on hold for a customer 

service representative, and then speak to that representative, who will keep you on the line to try 

to convince you to stay. These companies are betting that customers will be too impatient, busy, 

or confused to jump through every hoop. 

Canceling a subscription should be easy. That’s why the proposed update to the Negative 

Option Rule sets forth clear standards on what we call “click-to-cancel”: the obligation to make 

cancellation simple and easy. For example, the proposed rule requires any cancellation to be 

offered through the same medium as the subscription. Most importantly, it “must be at least as 

easy to use as the method the consumer used to initiate the Negative Option feature.” To take a 

simple example, this would put an end to companies requiring you to call customer service to 

cancel an account that you opened on their website. 

The proposed rule contains other proposed consumer protections, as well. Businesses 

marketing negative option products and services must clearly and conspicuously disclose key 

material terms—including when any trial period ends, the deadline to cancel, the frequency of 

1 Examples of these matters include: FTC v. Triangle Media Corp., 3:18-cv-01388-LAB-LL (S.D. Cal. 2019); FTC 

v. Credit Bureau Ctr., LLC, No. 17-cv-00194 (N.D. Ill. 2018); FTC v. JDI Dating, Ltd., No. 1:14-cv-08400 (N.D. 

Ill. 2018); FTC, Illinois, and Ohio v. One Techs., LP, No. 3:14-cv-05066 (N.D. Cal. 2014); FTC v. Health 

Formulas, LLC, No. 2:14-cv-01649-RFB-GWF (D. Nev. 2016); FTC v. Nutraclick LLC, No. 2:16-cv-06819-DMG 

(C.D. Cal. 2016); FTC v. XXL Impressions, No. 1:17-cv-00067-NT (D. Me. 2018); FTC v. AAFE Products Corp., 

No. 3:17-cv-00575 (S.D. Cal. 2017); FTC v. Pact Inc., No. 2:17-cv-1429 (W.D. Wash. 2017); FTC v. Tarr, No. 

3:17-cv-02024-LAB-KSC (S.D. Cal. 2017); FTC v. AdoreMe, Inc., No. 1:17-cv-09083 (S.D.N.Y. 2017); FTC v. 

DOTAuthority.com, Inc., No. 0:16-cv-62186-WJZ (S.D. Fla. 2018); FTC v. Bunzai Media Group, Inc., No. CV15-

04527-GW(PLAx) (C.D. Cal. 2018); and FTC v. RevMountain, LLC, No. 2:17-cv-02000-APG-GWF (D. Nev. 

2018). 

2 Fed. Trade Comm’n, Enforcement Policy Statement Regarding Negative Option Marketing (2021), 

https://www.ftc.gov/system/files/documents/public_statements/1598063/negative_option_policy_statement-10-22-

2021-tobureau.pdf. 3 See, e.g., Jeremy Glass, I Tried to Quit Three Gyms in 1 Day and Ended Up a Stronger Man, MEN’S HEALTH (Apr. 

14, 2020) https://www.menshealth.com/fitness/a32085243/how-i-canceled-gym-memberships/. 
charges, the date of payments, and cancellation information—before collecting any billing 

information from the customer. The Commission also proposes a requirement that businesses get 

the consumer’s unambiguously affirmative consent to the negative option feature of the 

transaction, separate from any other agreement. The proposal would still allow a business to try 

to persuade customers to stay, such as by offering perks or discounts. But it would have to get 

the customer’s express consent before doing so. 

These are some of the key components of today’s Notice of Proposed Rulemaking, which 

seeks comment on the proposal to update and modernize the Commission’s existing authority 

around negative option plans. 

If adopted, this rule would enable more efficient enforcement. It would create a more 

powerful deterrent by introducing the risk of civil penalties. And it would allow the Commission 

to return money to wronged consumers. 

The proposed rule would also provide clarity across industries about sellers’ obligations 

when engaging in negative option marketing. The click-to-cancel section of the proposed rule 

would give companies clear and specific instructions around making it at least as easy to cancel 

their products and services as it is to register for them. 

We invite members of the public to weigh in on these proposed amendments to the 

Negative Option Rule. As we move forward with the rulemaking process, we will carefully 

review public comments when deciding whether and how to craft a rule that would protect 

consumers from these potentially unfair or deceptive practices. 

This proposed rulemaking is part of a broader effort at the Commission to examine how 

we can deploy our scarce resources to achieve maximum impact. Using our rulemaking tools to 

clarify the law for market participants across the board and activate civil penalties and redress is 

a key part of this effort. 

Finally, we thank the FTC team for their terrific work in this area. Whether it’s unwanted 

subscription or hidden junk fees, ending exploitative business practices will continue to be a 

focus of this Commission. 

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