A federal appeals court has thrown out the Federal Trade Commission’s (FTC’s) “click to cancel” rule, concluding that the agency violated procedural requirements when crafting regulations aimed at making it easier for consumers to cancel subscription services.
In a ruling issued on July 8, the U.S. Court of Appeals for the Eighth Circuit vacated the FTC’s Negative Option Rule, which was designed to combat “negative option” marketing, a practice where companies treat a consumer’s silence or failure to cancel as agreement to continue—and be charged for—products or services.
While the judges acknowledged that they “certainly do not endorse the use of unfair and deceptive practices in negative option marketing,” they found that “the procedural deficiencies of the commission’s rulemaking process are fatal here.”…