FTC Click-to-Cancel Rule (2025): Vacated, But Still a Wake-Up Call for Subscription Businesses

If you run a subscription business, you’ve probably heard about the FTC’s “Click-to-Cancel” rule. Maybe you saw headlines saying it was approved, others saying it was delayed, and now news that it’s gone. So what’s actually true?

Here’s the short answer: the FTC finalized the Click-to-Cancel rule in late 2024, but a federal appeals court vacated it in July 2025. That means the rule itself is not currently in effect.

But don’t get comfortable. The same obligations are still being enforced under ROSCA, Section 5 of the FTC Act, state auto-renewal laws, and Visa and Mastercard’s subscription standards. Swipesum has spent months helping clients prepare for these changes, and the smartest companies are treating the vacated rule as a preview of what’s next.

In short, the name of the rule changed, but the pressure didn’t.

Why companies still need to pay attention

Over the past year, Swipesum has had dozens of conversations with SaaS founders, subscription box operators, and media companies asking the same question: “Do we really have to overhaul our cancellation flow now that the FTC rule was tossed out?”

The answer is yes, if you want to stay compliant and keep your customers.

Here’s why it still matters:

1. The FTC didn’t lose its enforcement power.
   The agency can still bring cases under the Restoring Online Shoppers’ Confidence Act (ROSCA) and the FTC Act’s Section 5, both of which require clear disclosures, informed consent, and a simple way to cancel. The “Click-to-Cancel” rule would have simply codified what the FTC already enforces.
2. States already passed their own versions.
   • California’s Auto-Renewal Law was updated in July 2025 to require online cancellation if signup happened online.
   • New York, Colorado, Delaware, and D.C. have similar laws on the books.
     These state rules apply no matter what happens at the federal level.
3. Card-network rules make it mandatory.
   Visa and Mastercard require online cancellation options, clear billing disclosures, and cancellation confirmations to prevent chargebacks and complaints. If your payment processor sees excessive “canceled recurring” disputes, you risk account penalties or even termination.
4. Consumer expectations changed permanently.
   What used to be seen as “good retention design” now reads like “deceptive UX.” A clean cancel path protects your brand and your bottom line.

What actually happened with the FTC rule

• October 2024: The FTC finalized the “Rule Concerning Recurring Subscriptions and Other Negative Option Programs,” often called the Click-to-Cancel rule.
• November 2024: The final text was published in the Federal Register, with an expected effective date of mid-2025.
• July 2025: The Eighth Circuit Court of Appeals vacated the rule entirely, citing procedural flaws in how it was adopted.

So there’s no federal Click-to-Cancel rule on the books today, but there’s also no safe harbor for complex or confusing cancellations.

The FTC may re-issue a corrected version, and most compliance teams expect that it will. Companies that align now will be ready when that happens.

What subscription businesses should do right now

At Swipesum, we advise clients to treat the vacated rule as the new standard anyway. Whether you manage recurring billing through Stripe, Chargebee, Recurly, or your own gateway, these best practices reduce risk, improve customer trust, and align with every major payment network’s policies.

1. Offer online cancellation equal to signup

If customers signed up online, they must be able to cancel online, without being forced into chat queues or phone calls. Keep it two clicks or fewer from account page to confirmation.

2. Capture separate consent for auto-renew

When a user agrees to a subscription, make sure the renewal terms, price, and cadence are displayed clearly and accepted separately from general terms and conditions.

3. Provide transparent pre-billing disclosures

Show exactly what the customer will be charged, when, and how to avoid the next billing cycle. Transparency now avoids chargebacks later.

4. Send instant cancellation confirmations

Once a user cancels, send an email confirming the effective date and any remaining charges. It satisfies Visa/Mastercard requirements and builds trust.

5. Keep detailed records

Maintain logs of consent, communications, and cancellations for at least three years. These are critical if a complaint or dispute arises.

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What it means for payments and chargebacks

We’ve seen the same pattern across hundreds of merchant audits: complicated cancellation flows correlate with higher “canceled recurring” chargebacks and lower authorization approval rates.

Simplifying the cancellation path isn’t just compliance, it’s economics. It protects your merchant account health and improves your standing with processors and card networks.

How Swipesum helps

Swipesum acts as your Chief Payments Officer-on-call. We help subscription and SaaS businesses align payment infrastructure with compliance and customer experience standards.

• We audit subscription and recurring billing setups to ensure they meet ROSCA, card-network, and state-law expectations.
• Our tool Staitment audits merchant statements to uncover interchange downgrades and missed savings opportunities.
• Our consulting team designs payment flows that reduce churn and disputes while improving retention through transparent billing.

With Swipesum, you can focus on your customers while we handle the payments, compliance, and optimization behind the scenes.

Schedule a consultation →

Quick FAQ

Is the FTC Click-to-Cancel rule in effect?
No. The rule was vacated by the Eighth Circuit Court in July 2025, so there is no federal requirement right now.

Do I still need to offer online cancellation?
Yes. State laws, ROSCA, and card-network policies already require it when signup occurs online.

Could the FTC bring the rule back?
Yes. The court’s decision focused on procedure, not substance. The FTC may restart rulemaking.

What happens if I ignore it?
You could face state enforcement actions, FTC investigations under ROSCA, or payment-network penalties for excessive disputes.

How can Swipesum help?
Our consultants audit your payments and customer-journey flow, ensure compliance, and optimize your subscription billing to protect revenue and customer trust.

The bottom line

The FTC Click-to-Cancel rule may be vacated, but it’s far from irrelevant. The trend toward easier cancellation, clear consent, and transparent recurring billing is here to stay.

Companies that move early don’t just stay compliant, they build stronger brands and longer-lasting customer relationships.

At Swipesum, we’ve seen this play out across the entire payments ecosystem: businesses that treat compliance as part of customer experience consistently outperform those that treat it as a checklist.

If you’re unsure whether your cancellation flow or subscription billing setup meets today’s expectations, talk to a Swipesum expert. We’ll help you modernize your systems, reduce risk, and turn compliance into a competitive advantage.