Click to cancel: clear terms and easy cancelling

The rule

The federal rule for online subscriptions is a statute, the Restore Online Shoppers’ Confidence Act, known as ROSCA. It is short, and the FTC enforces it through its general consumer protection powers.

A negative option feature is the mechanism by which silence counts as agreement: a free trial that turns into a paid plan, or a plan that renews unless the customer stops it. The three conditions line up with the order a customer meets them: terms before billing, consent before the charge, a way out afterwards.

The penalty amount for each act is set by the FTC Act and adjusted for inflation each year. PeekWell does not compute an amount for a site, because the figure applies to published enforcement against other companies and is context only.

The vacated click-to-cancel rule

The FTC had also amended its Negative Option Rule in 2024, a measure known as click-to-cancel, with an “at least as easy to use” standard for cancelling. It is not in force. In Custom Communications, Inc. v. FTC (No. 24-3137), decided on 8 July 2025, the Eighth Circuit held that the Commission’s rulemaking was procedurally insufficient because it never issued the preliminary regulatory analysis the statute requires, and it vacated the Rule. The court said it did not need to reach the petitioners’ other challenges. This article therefore does not rest on that rule.

The FTC went on enforcing ROSCA. In September 2025 it announced settlements with Chegg and Amazon, and its business guidance on Chegg tells sellers to make sure consumers know where to find the cancellation method and that the process is not confusing or difficult to use.

State laws

States add their own layer. California’s Attorney General says the state’s Automatic Renewal Law was amended effective 1 July 2025. As the Attorney General describes it, a business must obtain express affirmative consent, send renewal notices within set windows, send annual reminders, and let a consumer who enrolled online cancel online without steps that obstruct or delay cancelling. California’s Attorney General, district attorneys and city attorneys enforce it. Other states have their own rules, so a site selling across the country meets more than one standard.

What PeekWell checks and how

US-09 asks two questions of a site that appears to sell subscriptions. Are the terms of the recurring charge stated where a visitor can read them before billing? Is a simple cancellation route described or linked? The scan answers from public pages, not from a signup.

The check applies when the scan has seen signs that the site sells subscriptions. A language model reads the terms of service and checkout copy and pulls out the sentences about renewal and cancelling. Code checks for a link to a cancellation route.

The method is the same one used for the European rule on EU-13. Only the law it is compared with differs.

The scan has limits, and the report says so. It sees public pages and nothing behind a sign-in. It does not start a checkout, enter payment details, create an account or cancel one, so it cannot see whether the terms are shown beside the final button, whether consent is taken by a clear click, or how many steps the cancel flow takes. It reads wording and does not decide what the wording legally amounts to. A Passed means the expected behaviour was observed on the pages scanned. It does not say the site complies.

Why it matters for a company

The FTC has made subscriptions a regular subject. In its Chegg matter it alleged that the cancellation process was buried on its websites, took multiple clicks to find and was confusing and cumbersome, and that nearly 200,000 consumers were charged after asking to cancel since October 2020. The proposed order requires $7.5 million for refunds and simple cancellation mechanisms. In the FTC’s Amazon settlement of 25 September 2025, Amazon agreed to a $1 billion civil penalty and $1.5 billion in refunds. In March 2025 the FTC also announced a settlement with Cleo AI, a cash-advance app, whose proposed order would require clear disclosure of subscription terms, express consent before charging and a simple way to cancel.

In the Chegg and Amazon matters the FTC pleaded ROSCA, and the three conditions are checked against what a consumer sees: the terms on the page, the consent step, the route to cancel. Two of the three can be partly read from public pages, which is why a passive reading is useful, though only a live flow shows the rest.

For a company, the costs run beyond the penalty. Refund programmes, orders with monitoring, and the repeat charges that follow a failed cancellation all come from the same source: a cancel path that does not work as the page says. The Amazon and Chegg matters were both settlements filed with a court, and the Cleo AI matter was a complaint with a proposed order, so the allegations are the FTC’s and not findings of a court.

Smaller companies and larger companies

ROSCA has no size threshold. Any seller who charges online through a negative option feature is within the text.

In a small company the subscription is often a plan inside a hosted shop, an app store or a payment tool. The free-trial wording is the default template, the terms were copied from another site, and cancelling means emailing a support address that is checked weekly. Nobody has tested the path end to end, because nobody on a small team owns it. This review did not find an FTC or state publication about a clearly identified smaller company to cite, so the cases listed are large ones. That is a limit of what could be confirmed, and not a statement about who is within reach of the law.

In a larger company the pieces are split. Marketing owns the offer, product owns the account area, support owns the cancel flow, and a redesign can bury the cancel link a level deeper. The Amazon and Chegg matters are about that path: in Chegg’s case the FTC alleged the cancellation process was buried and that the company did not improve the visibility of the cancellation link. Larger companies also face state attorneys general in addition to the FTC.

How to fix it

1. Walk the path as a customer. In a private window, read the pricing page, go through signup to the last step without paying, then find how to cancel. Note every place the renewal and billing terms are or are not stated.
2. Put the terms before the card form. Before billing information is requested, state the price, how often it is charged, that it renews until cancelled, when a free or discounted trial turns into a paid plan, and how to cancel. Keep it in plain sight, not only in the terms page.
3. Get a clear yes. Use an unticked checkbox or a button that says what it does, and keep the renewal terms on the same screen as the consent.
4. Make the cancel route easy to find. Put “Cancel subscription” in the account area and the footer or help page, and describe it in the terms. If people sign up online, let them cancel online without a phone call, chat or form.
5. Keep the exit short. Cut extra pages, distracting offers and repeated prompts, and send a confirmation. When someone cancels, stop the charges.
6. Check state rules. If you sell in California, compare your renewal notices, annual reminder and online cancel against the Automatic Renewal Law as the Attorney General describes it. Other states may differ.
7. Re-scan. Run a scan again. The finding should clear once the billing terms and a reachable cancellation route are on the public pages.

Whether your wording satisfies ROSCA or a state law is a question for your legal adviser, and Peeky reports only what it sees.