‘Click to Cancel’ is Here! The FTC’s New Rule That Could Make Your Subscription Illegal

Summary

Special Ops with Emma Rainville Episode Summary: “‘Click to Cancel’ is Here! The FTC’s New Rule That Could Make Your Subscription Illegal” Release Date: July 22, 2025

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Introduction

In this critical episode of Special Ops with Emma Rainville, hosts Ryan and Perry delve into the Federal Trade Commission’s (FTC) recently implemented “Click to Cancel” rule, a regulation poised to significantly impact businesses operating subscription-based models. Released on July 22, 2025, the episode serves as a comprehensive guide for entrepreneurs and business owners to navigate the complexities of this new legal landscape, ensuring their subscription services remain compliant and profitable.

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Understanding the Significance of Click to Cancel

The conversation opens with Ryan highlighting the gravity of the Click to Cancel rule. He emphasizes the immediate need for subscription businesses to adapt or face substantial fines:

• Ryan [00:24]: "Your click to cancel anytime offer could get you sued by the FTC."

Perry concurs, underscoring the dual importance of transparent cancellation processes and the broader implications for consumer trust and legal compliance.

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Legal Requirements and Compliance Essentials

A substantial portion of the discussion revolves around the specific legal mandates introduced by the FTC. Perry breaks down the core requirements, emphasizing clarity and accessibility:

• Perry [02:14]: "You need to clearly and conspicuously disclose all material terms of the offer."

Key compliance aspects include:

• Prominent Cancellation Links: Cancellation options must be easily accessible and not buried within terms and conditions. They should be placed adjacent to the consent mechanism to ensure visibility.

• Immediate Disclosure: All material terms, such as pricing, billing frequency, and any introductory discounts, must be disclosed without obfuscation.

• Ryan [03:05]: "That's no longer can you do. Well, you shouldn't have been doing that."

• Perry [03:32]: "It's like you comply or you don't. You can split test, you can try different things, but if the consumer doesn't know that they're enrolling in a subscription or a membership program, that's a problem."

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Operational Impact on Subscription Models

Ryan and Perry discuss the practical implementation of these regulations on business websites. Using the example of a hypothetical supplement company, they illustrate how to effectively integrate cancellation options:

• Perry [08:28]: "Like, it needs to be apparent, it needs to be unavoidable. Like just make it easy for the consumers."
• Ryan [08:57]: "Manage my subscription. That's a brilliant one."

Strategies include:

• Visible Tabs: Placing a "Manage My Subscription" tab prominently on websites to facilitate easy access.
• User-Friendly Forms: Implementing preloaded forms that require minimal input from consumers to cancel their subscriptions, streamlining the process.

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Risks and Penalties for Non-Compliance

The hosts stress the severe consequences of failing to adhere to the Click to Cancel rule. They caution against neglecting these regulations, highlighting potential legal and financial repercussions:

• Perry [09:24]: "The fines are going to be real."
• Ryan [09:16]: "I'm a huge, huge advocate for two days before every billing, every single."

Additionally, non-compliance can lead to:

• Class Action Lawsuits: Increased risk of lawsuits from consumers feeling deceived or trapped in unwanted subscriptions.
• Reputational Damage: Loss of consumer trust and brand integrity, which can have long-term detrimental effects on business growth.

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Practical Steps for Ensuring Compliance

To aid businesses in navigating these changes, Ryan and Perry announce the availability of a Click to Cancel compliance checklist. This resource, available for download at specialopspodcast.com, provides actionable steps to ensure subscription models meet the new regulatory standards.

• Ryan [10:14]: "Every marketer ever has argued with me, but."
• Perry [10:16]: "The cost of the goods."

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Recent Developments and Future Outlook

In the latter part of the episode, Ryan and Perry address recent legal challenges to the FTC’s Click to Cancel rule. The 8th Circuit Court has ruled the FTC’s enforcement as non-enforceable due to procedural shortcomings. However, they caution that:

• Perry [10:56]: "California is going to make you do it anyway and a lot of AGs are going to follow suit."
• Ryan [12:10]: "If you sell into California, you still got to comply with the same thing."

Despite the federal setback, state-level enforcement, particularly in California, remains stringent. Additionally, existing federal statutes like the Restore Online Shoppers' Confidence Act (ROSCA) continue to govern subscription business practices, mandating truthful billing disclosures and consent mechanisms.

• Perry [12:37]: "So the rules haven't changed the regulatory body, technically."
• Ryan [12:42]: "Don't steal people's money."

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Conclusion

The episode concludes with a firm reminder of the essential nature of compliance:

• Ryan [13:00]: "We just wanted to interrupt that so that you knew. Thank you so much."
• Perry [12:43]: "Don't steal people's money."

Ryan and Perry reiterate the importance of treating customers fairly and transparently, aligning business practices with both legal requirements and ethical standards. They encourage listeners to stay informed and utilize the provided resources to safeguard their businesses against potential legal challenges and to maintain profitability in a regulated marketplace.

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Key Takeaways:

• Immediate Action Required: Subscription-based businesses must implement clear and accessible cancellation mechanisms by July 14th to comply with the FTC’s Click to Cancel rule.
• Transparency is Crucial: All material terms related to subscriptions must be prominently disclosed and easily accessible to consumers.
• Risk of Non-Compliance: Failure to adhere to these regulations can result in significant fines, legal action, and damage to brand reputation.
• Stay Informed and Prepared: Utilize available resources, such as the Click to Cancel compliance checklist, to ensure your business remains compliant and profitable.

For more detailed strategies and actionable insights, listeners are encouraged to download the compliance checklist from Special Ops Podcast and stay tuned for upcoming episodes addressing ongoing regulatory changes.

Transcript

[Ryan]

Why is Click to Cancel a big deal?

[Perry]

Two big things.

[Ryan]

I've got a supplement and needs to have on it a way for them to cancel. Even though there's no members area or anything like that?

[Perry]

Correct.

[Ryan]

And it can't be buried.

[Perry]

No. I like having it as a tab. If it's only subscription, you can get into where you put that. But if you're selling straight sale and subscription, I like workers. You're not going to like that.

[Ryan]

Your click to cancel anytime offer could get you sued by the FTC. That's because in just a few days, the FTC's new rule click to Cancel comes into effect. That's going to happen on July 14th. First off, what the hell is Click to cancel and what does it mean for your subscription model business? Today Ryan and I are diving into one of the biggest changes to hit subscription marketing in years. The FTC's new Click to Cancel rule. This regulation forces businesses to make cancellation as easy as signing up or else you will face a steep fine. Ryan and I are breaking down what this means for your funnels, your checkout flow, and how to avoid turning customer retention attention into legal exposure. If you're running a membership continuity or auto ship model, this episode is non negotiable.

[Perry]

I love this topic.

[Ryan]

I know you do. I hate this topic. This topic crushes my profit margins. That's the only thing I care about. But it is important because it's been coming for a long time.

[Perry]

Clicker file.

[Ryan]

Very long time.

[Perry]

Very long time.

[Ryan]

And so the first thing I want to ask you why is click to cancel a big deal. Two big things I've got to stop. And all it has to be is let's say it's Green leaf Nutrition. So greenleafnutrition.com needs to have on it a way for them to cancel. Even though there's no members area or anything like that, there has to be a tab somewhere on Green Leaf Nutrition that says cancel your trade and it can't be buried. Let's talk about that.

[Perry]

No, I like having it. I mean if you are running subscription business, if it's only subscription, it also. But if you're selling straight sales like that subscription, I like having it at the top because it's very very easy to find. Described that way. Most people are going to put in what is very important is X, Y and Z and it doesn't. That's now another little hook for the FTC to come and get civil penalties. Geez, good times.

[Ryan]

So what are the legal requirements exactly and what are the gray areas people can live in. You know, I'm going to ask that how do I get right up to the line?

[Perry]

So black letter law first.

[Ryan]

Okay.

[Perry]

You need to clearly and conspicuously disclose all material terms of the offer. Nothing new there. Those terms need to be unavoidable, which means like you cannot, absolutely cannot miss them.

[Ryan]

Yep.

[Perry]

They also need to be disclosed in.

[Ryan]

They're not buried in your TNCs.

[Perry]

Not buried in your TNCs at the bottom of the page. They also need to be appear immediately adjacent to the consent mechanism. And so the consent mechanism is basically whatever you're using to get the consumer to agree that they're agreeing to a subscription. And the reason that's important is because a lot of people would bury these things in different parts of the webpage. And so like the top of the page might say one thing and then the subscription is disclosed down below, but you're getting consent up top. That's no longer can you do. Well, you shouldn't have been doing that.

[Ryan]

In the first place, but really, really can't do that. And the reason this really, really the time, though. But really, we've been saying this, you and I have been saying this for a very long time, but really, really the time.

[Perry]

Really, really. Because the FTC's already come out and they delayed enforcement again. And finally July 14th, the FTC decides we're done. Yeah, you guys have had way too much time to figure out how to figure this out.

[Ryan]

We're sick of old ladies calling pissed off that you've taken their Social Security checks and we're coming for you.

[Perry]

Exactly.

[Ryan]

Okay, so how do I get right up to the line?

[Perry]

I think so much of this is now going to be binary. It's like you comply or you don't. You can split test, you can try different things, but if the consumer doesn't know that they're enrolling in a subscription or a membership program or subscribe and save, that's a problem. Like the FTC has come out in every single way and said, this is unlawful, you must disclose the terms. And it's all material terms. So it's the price, it's the frequency, it's the fact that like, if you're giving an incentive on the first offer or the first subscribe and save offer, you need to disclose the. Not only that any sort of discount is applicable only to the first order, but what's the rebuild price? It's like all this needs to be disclosed. You can't miss it. Like, you don't have to use a Checkbox. But there isn't going to be a lot of discussion with the FTC anymore. I mean, sure, you're going to run a consumer survey of what is the consumer, you know, did they know they were running a subscription?

[Ryan]

Well, that's how we almost never.

[Perry]

Well, yeah, but I mean, that's how we would usually do it. But at the same time, like the FTC is going to say, this is the button you're using to get consent. This stuff isn't appearing anywhere near there.

[Ryan]

Yeah.

[Perry]

So what gives? So I like this topic, but I'm afraid it's going to be much more binary. It's going to be kind of black and white, like split test away, guys. But you really need to done with the days of trying to make this.

[Ryan]

This is a really big deal. And so Perry Belcher and I actually, I'm on another podcast for people who don't know called Train Wreck with Perry Belcher. And we're actually going to be filming an episode next week about how to compliantly do this. And so he's been doing it compliantly for years and years and years, mainly because he doesn't like the idea of people feeling tricked by him because his entire reputation and he's in a different space. He's not in the supplement space, but he's been doing it for years and years and years. And so we're going to be talking about that. But I will say Apple is. I'm going to sidetrack you a little bit. Have you ever seen Apple Pay? Apple Pay compliance is if I'm going to rebill you and they use Apple Pay, it literally says when they go to do the. You know what I'm talking about, little click, click, so that your face allows it to go. It literally says right there, you can see it, build every 14 days, build every 13 days, build again in 28 days. And so a lot of the Apple compliance is very easy to understand and read. This is just a side note from operationally. If you go and read the compliance for Apple Pay and you do that, you're probably going to be just fine. But there's going to be some marketing fairy dust that you're going to need to do there by making your products more advantageous to rebuy and rebuy and rebuy.

[Perry]

Yeah. And don't forget when we were talking about disclosing all these material terms, no hyperlinks. Like, it's very clear that you can't bury this stuff in a hyperlink somewhere.

[Ryan]

Right.

[Perry]

So even if you're putting it right next to whatever you're using to get consent to this. Hyperlinks aren't going to work.

[Ryan]

What's up? We interrupt this podcast to remind you to like and subscribe so that you can always be in the know of when Ryan and I drop a new episode of Marketing on Trial. Also, sign up at www.specialopspodcast.com for our visionary vault and get all of our freebies. I want to talk about the last, the second half and the last bit of this. Now, I've agreed. I know that I've agreed. I get your product and I want to cancel. It can no longer be. I remember one of the best guarantee. This is years and years and years and years and years ago. One of the best guarantees I ever saw was by a guy named Justin Goff, copywriter in Austin. I don't want to call him a copywriter. He's a business owner, he's a consultant. Like, he's brilliant marketer. And he had this guarantee which was if you'd like your money back, I want to give you your money back. Write me a letter, mail it in and I'll give you your money back. No fucking way is anybody going to write a letter. No way. And so what a brilliant guarantee because it's like no questions asked. You write me a letter and I'm giving you your money back. No one's taking the time to a letter.

[Perry]

Never.

[Ryan]

I mean, obviously that would never work. Now, we couldn't do that because of compliance now, but it was absolutely brilliant. Those days are over. I can't even tell customers to call in. What are my regulations? I can't even make it so that they have to write in. What do I need to do to make it so that people can cancel.

[Perry]

So anybody that's been doing business in California should be doing this already.

[Ryan]

They're not. So let's explain. No one is. So let's explain it.

[Perry]

So you need a very prominent link on your website, somewhere where the consumer goes, clicks on it. It's going to load to basically a preloaded form. The consumer is going to enter their email address or whatever you need to do to find the account and by submitting that form, they're done. That is all that they have to do. Hence the click to cancel moniker. It's you click on this button, you submit your cancellation request.

[Ryan]

So I have, I have my regular website. So if they look me up, let's say I'm, they want to return my book. Shameless, Plug my book. Scope, an operational framework So I have scope. ReadScope Co is my website for those of you who want my book marketer at heart. But if they want to, well, that's not really a thing because it's not continuity. But okay, let's. It's a supplement. It's a supplement. I've got a supplement. And all it has to be is let's say it's Green leaf Nutrition. So greenleafnutrition.com needs to have on it a way for them to cancel. Even though there's no members area or anything like that. So there has to be a tab somewhere on Greenleaf Nutrition that says cancel your subscription here.

[Perry]

Correct.

[Ryan]

And it can't be buried. Let's talk about that.

[Perry]

No, I like having it as a tab. Like I mean if you are running a subscription business, if it's only subscription, we can get into where you put that. But if you're selling straight sale and subscription, I like having it at the top because it's very, very easy to find. Marketers are not going to like that. They're going to want at the bottom. Most people are going to put it at the bottom. What is very important though is like it's not in like gray on gray text or very, very small. It needs to be next to everything else. Some websites will just have like a legal kind of heading and it'll have.

[Ryan]

Like your cancellations something.

[Perry]

Manage my subscription, right?

[Ryan]

Oh, manage my subscription. That's a brilliant one. Right at the top. Manage my subscription.

[Perry]

Yeah. And I don't like some brands will say this is my subscription policy or this will be something other than like it's very clear this is where you go to cancel. Like it needs to be apparent, it needs to be unavoidable. Like just make it easy for the consumers.

[Ryan]

I think we've told clients, a lawyer, I'm just saying. But yeah, you told clients this multiple times because. Because the fines are going to be real.

[Perry]

Well, the fines are going to be real. You also don't want people on subscription that don't want to be on there. Like Perry was saying. Right. Like it's your name, it's your brand at stake. So you start losing integrity with consumers. It class action liability. It's just with the FTC now coming in and having civil penalty authority, it is way too much risk. Just not comply.

[Ryan]

Right. I tell people all the time treat it like your customers are absolutely stupid.

[Perry]

Oh truly.

[Ryan]

Like they are stupid. Just because it says an email, a follow up email. So the compliance rules are you get an email two days before the very first billing. I'm a huge, huge advocate for two days before every billing, every single. And then click here. To manage the cost involved in sending people things that they don't want that they're going to refund is astronomical. I'm from a profitability standpoint, not from a marketing standpoint. Every marketer ever has argued with me, but.

[Perry]

Well, then you get chargebacks and the.

[Ryan]

Cost of the goods. Most people keep them. Right. So if you're running any kind of recurring revenue model, this episode just saved your business. Ryan and I put together a Click to Cancel compliance checklist to make sure you're ready for July 14th. Download it@special opspodcast.com stay compliant, stay profitable. See you next time. You just watched this whole thing on Click to Cancel, but from the time that we filmed it to the time that you're watching it, things change. So we need to make updates. We still want to put it out there because it's really good information and you should be doing all that shit anyway. But there are some changes and Ryan's gonna update us. So, Rye.

[Perry]

So 8th Circuit came out and said, rules not enforceable. FTC failed to follow rulemaking procedures. Back to the drawing board.

[Ryan]

So everything we just said, not so much, but.

[Perry]

So FTC's rule is not going to affect. So the. Nope. Or the prohibition on no misrepresentations of your product. That's out at the federal level. Problem is California, as of July 1st of this year, basically verbatim, click to cancel. So still need to have an online method of cancellation. Needs to be simple and easy to find. Can't misrepresent your products. Still an open question on whether or not that misrepresenting a material characteristic of the product as opposed to the subscription or the billing feature is. Is going to be an issue. But. Yeah.

[Ryan]

So the rules haven't changed the regulatory body, technically.

[Perry]

Exactly. Yeah, exactly. So still in the same place. Be truthful with your billing disclosures. Get consent to it.

[Ryan]

Ryan, you're such a conversion killer. I mean, you never let us lie.

[Perry]

I mean, I don't like stealing people's money.

[Ryan]

Oh, such a goody two shoes. I'm just kidding.

[Perry]

I mean, otherwise you guys update.

[Ryan]

Is that there's an update. They're making you think that you don't need to, but I mean, this, too.

[Perry]

Yeah. I mean, so if you sell into California, you still got to comply with the same thing.

[Ryan]

Yeah.

[Perry]

So.

[Ryan]

And probably they're going to switch a few things around to make this back a thing anyway, so go ahead and just get compliant.

[Perry]

Yeah. I mean given that we have a new administration there has been some pushback on whether or not the FTC had the authority in the first place. Is the FTC going to go back through the full rulemaking procedure? I don't know but.

[Ryan]

But California is going to make you do it anyway and a lot of AGs are going to follow suit.

[Perry]

Exactly.

[Ryan]

General.

[Perry]

And you still have Rosca out there which is the federal statute that governs a lot of this.

[Ryan]

So wow. It looks like you don't need to comply. You still need to comply.

[Perry]

Don't steal people's money.

[Ryan]

Don't steal people's money. We don't like thieves anyway. Don't listen to our show if you're stealing. We don't like you but you can like and subscribe. Ryan, thank you so much.

[Perry]

Thank you.

[Ryan]

All the other stuff still applies here. We just wanted to interrupt that so that you knew. Thank you so much.

[Perry]

Thanks.