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In a decision with wide-reaching implications for consumer rights and digital commerce, the US Court of Appeals for the Eighth Circuit  the Federal Trade Commission’s (FTC) , which was finalized in 2024 and final disclosure and cancellation requirements were set to take effect on July 14, 2025. Initially proposed in 2023 as a commonsense extension to the FTC’s , which protects consumers from being charged for goods or services they did not explicitly agree to purchase, Click-to-Cancel would have required businesses to allow consumers to cancel subscriptions through the same simple method used to enroll typically, online and in one click. The rule would have applied to any business that offers automatically renewing subscriptions, such as streaming services and “subscribe and save” billing models.

While the rule directly targeted businesses offering automatically renewing subscriptions, its compliance implications extended to payment service providers (PSPs) that facilitate and manage automated payment authorizations, store credentials for recurring billing, and handle cancellation or refund requests. If a merchant failed to comply with the rule, the PSP’s role in facilitating those transactions could have exposed it to secondary liability.

Now, with the rule formally struck down by a federal appeals court, businesses that offer subscription-based services/products are still exposed to compliance risk under existing  and  (UDAP/UDAAP) standards, and the  (EFTA), and various other state laws. This revocation also does not remove consumer expectations; instead, it creates a gray zone where the reputational, regulatory, and legal risks are arguably even more complex than before, because more states may create their own regulatory schemes to fill the gap.

The Bigger Picture

Originally introduced to address a key problem in negative option marketing, Click-to-Cancel was seen by regulators as a solution for consumers who may have found cancelling subscriptions difficult, confusing, or time-consuming. When it originally announced a notice of proposed rulemaking, the agency received more than 16,000 comments from consumers and consumer interest groups in support of the FTC’s proposal. The court’s decision may appear at first to benefit businesses by removing an “onerous” new rule. However, in reality, other consumer protection laws that require clear, conspicuous, and simple cancellation processes still exist and are enforceable both on the federal and state level. For example, according to the ’s prohibition on unfair and deceptive practices, financial institutions offering subscription-based products or services online must ensure that consumers can easily understand and exercise their right to cancel.

Additionally, many states have proposed more stringent consumer protection laws to compensate for the absence of Click-to-Cancel. For example, New York’s  would, if passed, require businesses that offer subscriptions to make the terms of their products clear and conspicuous. Previously established state-level “automatic renewal” laws, like those in California and New York, specifically require straightforward online cancellation options. Without Click-to-Cancel, state attorneys general may take a heavy handed approach to enforcement. Businesses should continue prioritising transparent, user-friendly cancellation options for customers or risk potential enforcement actions, reputational damage and lawsuits even without the Click-to-Cancel rule in place.

Why Should You Care?

While the Click-to-Cancel has been vacated, other consumer protection laws on both a federal and state level still apply to these types of products Businesses that offer subscriptions should already be adhering to laws such as UDAP, EFTA, FCRA; while these may not require as detailed or conspicuous cancellation processes as Click-to-Cancel, it is possible that regulators will rely more heavily on these regulations to enforce existing consumer protection violations. Subscription-based business models and PSPs that enable their transactions should consider the following to evade compensatory enforcements:

1. Legal and Compliance Exposure Doesn’t Disappear

The Eighth Circuit’s decision removed the Click-to-Cancel rule, but not the FTC’s authority to police unfair or deceptive practices, nor did it preempt state law. Businesses offering subscription services must still grapple with a complex legal matrix. For example, California’s  (ARL) imposes stringent cancellation requirements on businesses operating in California or serving the state’s residents, and is actively enforced by California’s Automatic Renewal Task Force (CART). Earlier this year, CART  HelloFresh to pay $7.5m to settle a civil lawsuit over alleged ARL violations, including deceptive enrollment and auto-renewing subscription plans without proper disclosure or consent.

PSPs and businesses that offer subscriptions should consider: 

• Conducting an impact analysis - Evaluate the online products and services offered that may fall under federal or state Click-to-Cancel requirements, and ensure compliance with the applicable laws in each jurisdiction of operation. Pay particular attention to subscription-style products, add-on services, or premium accounts, as well as anything "free trial" that rolls into paid services. Determine if you operate or have customers in states that have specific laws similar to that of the Click-to-Cancel rule.
• Identifying impacted products and services - Map out which offerings fall under negative option billing or auto-renewal models, and include both in-house services and third-party products offered through the company, so that the company can identify potential compliance risks, ensure proper disclosures, and prevent unexpected consumer charges.
• Third-party compliance - Ensure contracts with merchants mandate cancellation processes that adhere to federal and state laws. Make sure to carefully review any new merchants’ subscription model, paying close attention to free trials, auto-renewals, and “silent” continuations.

2. Risk of Even More Patchwork Regulation

With the federal rule vacated, more states may introduce or strengthen their own rules on subscription cancellation. This creates operational and legal complexity, particularly for companies serving users in multiple jurisdictions. Businesses will need to make sure their regulatory change management program is strong to ensure compliance across multiple states with subscription cancellation regulations.

PSPs and businesses that offer subscriptions should consider: 

• Performing a gap analysis - Compare current cancellation processes and procedures to state-level Click-to-Cancel requirements and other federal laws and regulations that apply to these types of products/services. 
• Conduct a regular rule sweep - Ensure that upcoming deadlines and effective dates for each state are known to make time for adequate planning and regulatory implementation.

3. Reputational Harm and Consumer Distrust

The public sentiment that fueled Click-to-Cancel has not disappeared with the court’s ruling. Consumers still expect cancellation to be quick and painless, especially for subscriptions they use frequently. Any misalignment between consumer expectations and actual design, such as forcing users to call during business hours or navigate hidden menus, can spark viral backlash, negative media coverage, and user churn.

Businesses that offer subscriptions should consider: 

• Reviewing customer disclosures - Ensure enrollment and cancellation disclosures clearly explain terms, renewal periods, and cancellation methods, and align digital payment platforms and account-opening materials with state requirements, so companies can reduce regulatory risk, avoid consumer complaints, and maintain trust.

4. Class Action and Consumer Litigation Risks

Regulators such as the Consumer Financial Protection Bureau (CFPB) may be currently enforcing consumer protection laws on a very limited basis; however, private litigation risks may increase. Plaintiffs’ attorneys may see the absence of clear federal standards as an opportunity to pursue deceptive practices claims under state law or general consumer protection principles. Companies with outdated or opaque cancellation practices and PSPs that partner with them could find themselves defending high-cost lawsuits, even if they are technically in compliance with the current federal regulatory landscape.

Rather than view this decision as a green light to obscure cancellation paths, businesses should treat it as a warning to continue to align cancellation practices with fairness, transparency, and ease of use standards to avoid UDAP/UDAAP exposure and non-compliance with other applicable federal and state consumer protection laws.

Companies should consider: 

• Reviewing policies and procedures - Determine if any updates need to be made to internal documentation to ensure cancellation processes align with both state and federal regulatory expectations. Document escalation paths for customer complaints related to subscription cancellations.
• Assess third-party and vendor relationships - Review partner contracts (e.g., point-of-sale platforms, online payment processors, logistics and fulfillment services). Confirm vendors are compliant with Click-to-Cancel requirements in relevant states.
• Evaluate training needs - Train staff, call center agents, and compliance teams on cancellation processes for applicable products/services. Provide specific guidance on handling disputes and customer complaints related to auto-renewals.

Rather than treating the Eighth Circuit’s decision as the end of the matter, PSPs and businesses that offer subscriptions should view it as a signal that the compliance environment around subscription cancellations remains unsettled and potentially more complex. The absence of a federal standard increases reliance on existing federal statutes, state laws, and consumer expectations, all of which continue to create meaningful legal and reputational exposure. Companies that act now to simplify cancellation processes, strengthen oversight of third-party offerings, and prepare for further state activity will be in a stronger position to manage regulatory risk and maintain consumer trust going forward.