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Automatic Renewal and Negative Option Subscriptions

The federal and state rules on subscriptions that keep charging until you cancel - what a seller must disclose and obtain before enrolling you, the cancellation mechanism it must offer, and where the law currently stands.

Informational only - this is not legal advice. These definitions explain general legal vocabulary in plain English. They are not advice about your situation, reading them creates no attorney-client relationship, and the law differs from state to state and changes over time. For advice you can rely on, speak to a lawyer licensed in your state.

What it means

A negative option is any arrangement in which a consumer's silence is treated as consent to keep being charged: a free trial that converts to a paid plan, a subscription that renews automatically, a continuity programme that ships until cancelled. Federal law for online sales requires the seller to disclose all material terms of the arrangement clearly and conspicuously before obtaining the consumer's billing information, to obtain the consumer's express informed consent before charging, and to provide a simple mechanism to stop recurring charges. Charging a consumer without those three things is an unfair or deceptive practice.

The Federal Trade Commission adopted a broader rule in 2024 that would have required, for every negative option in any medium, cancellation to be as easy as sign-up - the "click-to-cancel" rule - but a federal court of appeals set the rule aside in 2025 on procedural grounds before it took effect. The Commission's earlier, narrower rule on prenotification plans remains, and the Commission continues to bring cases under the online statute and its general authority. The practical position is that the federal online requirements are in force, and the broader cancellation standard is not.

State automatic renewal laws fill much of the gap. A majority of states now require clear and conspicuous disclosure of renewal terms, affirmative consent, an acknowledgment sent to the consumer, notice before a free trial converts or before a long-term renewal, and an online cancellation route for anyone who signed up online; some require reminders before each renewal and give consumers a private claim. These laws apply according to where the consumer is, not where the seller is, so a national subscription business is bound by the strictest of them.

Where this comes from

Restore Online Shoppers' Confidence Act, 15 U.S.C. §§ 8401-8405 (§ 8403 states the disclosure, consent and cancellation requirements for online negative option features); the FTC's Rule Concerning Recurring Subscriptions and Other Negative Option Programs, 16 C.F.R. Part 425, as amended in 2024, was vacated by the United States Court of Appeals for the Eighth Circuit in 2025, leaving the prior Part 425 in effect; the FTC Act, 15 U.S.C. § 45. Representative state laws are California Business and Professions Code §§ 17600-17606 and New York General Business Law § 527-a; each state's act states its own disclosure, consent, notice and cancellation terms.

When people hire a lawyer for this

A consumer charged for a subscription they did not knowingly agree to, or that they could not cancel, should dispute the charges with the card issuer and complain to the state attorney general, which is where most of these cases are actually resolved. A business that sells anything on a recurring basis should have its sign-up and cancellation flows reviewed against the strictest state law it sells into, because the state statutes are enforced by attorneys general and by class actions, and the federal standard is currently narrower than the state ones.

Find a lawyer for this in your state

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Part of the LawyerLand plain-English legal glossary. Definitions are written from primary sources - statutes and court rules - and each entry states the authority it rests on, or says plainly when the doctrine is state law with no national rule.

If you cannot afford a lawyer, civil legal aid programmes provide free help with many of these problems: civil legal aid programmes by state.

Related free reference tools: statute of limitations for a personal-injury claim, by state, quoted from each state's official text - part of LawyerLand's legal reference tools.