Latest news with #NegativeOptionRule
Associated Press
09-07-2025
- Business
- Associated Press
CCIA Applauds Eighth Circuit Decision to Vacate FTC's Negative Option Rule
Washington, DC July 08, 2025 --( )-- The Consumer Credit Industry Association (CCIA) applauds today's decision by the U.S. Court of Appeals for the Eighth Circuit to vacate the Federal Trade Commission's (FTC) Negative Option Rule in its entirety. The Eighth Circuit held that the FTC's failure to issue a required Preliminary Regulatory Analysis (PRA) before finalizing the Rule was a fatal procedural deficiency under Section 22 of the Federal Trade Commission Act. The Court emphasized that this omission was not harmless and resulted in real prejudice to regulated parties, depriving them of the opportunity to submit informed public comment and help shape the rule. 'Vacating the Rule is appropriate because of the prejudice suffered by Petitioners as a result of the procedural error,' the Court stated. In its opinion, the Court concluded that (FTCA Act) § 22 required the Commission to issue a preliminary regulatory analysis after the ALJ found the Rule would meet the $100 million economic impact threshold, even though the Commission initially estimated it would not. 'The ruling marks a major victory for CCIA members and the broader consumer financial protection industry,' said CCIA President & CEO, Sarah Ferman Baker. 'By vacating the rule, the Court upheld the principle that agencies must conduct rulemaking transparently and lawfully, particularly when regulations carry such significant economic implications.' CCIA has consistently opposed the Rule, both during its development and through legal proceedings. The association submitted an amicus brief to the Court urging the very result issued today and filed detailed comment letters with the FTC, while also encouraging Congress to consider a Congressional Review Act (CRA) resolution to overturn the Rule legislatively. The Court also cited the Fifth Circuit's 2025 decision vacating the FTC's CARS Rule for similar procedural failings, highlighting a broader judicial trend toward holding the Commission accountable for compliance with its statutory obligations. About CCIA For over 70 years, the Consumer Credit Industry Association (CCIA) has been the trusted advocate for consumer financial protection and security products, dedicated to enhancing consumer financial security by preserving the availability, value, and integrity of its members' products. CCIA promotes fair regulations that balance consumer protection with industry innovation to ensure financial products remain accessible and affordable for millions of Americans. Contact Information: Consumer Credit Industry Association John Euwema 630-824-7300 Contact via Email Read the full story here: CCIA Applauds Eighth Circuit Decision to Vacate FTC's Negative Option Rule Press Release Distributed by
Yahoo
09-07-2025
- Business
- Yahoo
FTC's click-to-cancel rule has been struck down by federal judges at the eleventh hour
In 2024, the FTC was set to implement the "click to cancel" rule, which would have placed requirements on companies to be forthright about the terms and conditions and exit options for their subscriptions. Since that time, the agency has become a less independent part of the executive branch and in May, it delayed enforcing some parts of this rule to July 14. Today, the entire plan appears to be dead in the water after judges in the US Eighth Circuit Court of Appeals decided to vacate the rule. The "click to cancel" rule, which was officially named the Negative Option Rule, drew appeals from industry associations and individual businesses. These parties argued the FTC had failed to follow correct procedures and conduct an analysis before issuing the rule. The judge panel has agreed with them. "While we certainly do not endorse the use of unfair and deceptive practices in negative option marketing, the procedural deficiencies of the Commission's rulemaking process are fatal here," the ruling reads. "Vacatur of the entire Rule is appropriate in this case because of the prejudice suffered by Petitioners as a result of the Commission's procedural error." The judges may not endorse those actions, but it looks like for the foreseeable future, businesses will be able to keep taking them without consequences.
UPI
09-07-2025
- Business
- UPI
Appeals court strikes down 'click-to-cancel' rule
July 9 (UPI) -- Just days before federal government was to enforce the so-called click-to-cancel rule, an appeals court struck it down, finding the Federal Trade Commission had failed to follow procedural requirements under the law. Known colloquially as the click-to cancel rule, the Negative Option Rule was to go into effect July 14, forcing companies to make it as easy for consumers to cancel enrollment in subscriptions and programs as it was for them to enroll. The rule has received pushback from various industry associations and individual businesses who filed a legal challenge against it in October, arguing it is "arbitrary" and "capricious" under the Administrative Procedure Act due to its scope and the FTC failed to follow procedural requirements under the FTC Act. In its ruling Tuesday, the U.S. Court of Appeals for the Eighth Circuit generally agreed. "While we certainly do not endorse the use of unfair and deceptive practices in negative option marketing, the procedural deficiencies of the Commission's rulemaking process are fatal here," the court wrote in its 23-page ruling, adding that "vacatur of the entire Rule is appropriate in this case because of the prejudice suffered by petitioners as a result of the commission's procedural error." According to the ruling, the FTC specifically failed to issue a preliminary regulatory analysis of the rule as required due to its annual effect on the U.S. economy being found to be more than $100 million. The FTC had argued that it was not required to prepare such analysis as its initial estimate of annual economic impact did not surpass that threshold. Lina Khan, former FTC commissioner during the Biden administration, which was behind the click-to-cancel rule, blamed the Trump administration for dragging its feet on implementing it, as it was first set to go into effect in May, and urged supporters of the rule to contact their local politicians. "The rule was set to go into effect in May but this @FTC slow-walked it -- and now a court has tossed it out, claiming industry didn't get enough of a say," she said on X. "Anyone frustrated by how difficult firms make it to cancel subscriptions can tell the @FTC commissioners to re-issue the rule and urge members of Congress to make it law." Mark Meador, the current FTC commissioner, blamed the Biden administration, saying it "cut corners and didn't follow the law." "Process matters," he said on X. Meanwhile, America's Communications Association Connects lauded the ruling, saying the FTC overstepped its authorities, which could have had wider implications for how businesses handle all areas of transactions. "It sought to impose compliance requirements that made it more difficult for our members to provide the best value and customer experience possible," ACA Connects, which represents some 500 smaller and medium-sized broadband, video and phone services providers, said in a statement. "We're glad the Eighth Circuit recognized this reality today."
Engadget
08-07-2025
- Business
- Engadget
FTC's click-to-cancel rule has been struck down by federal judges at the eleventh hour
In 2024, the FTC was set to implement the "click to cancel" rule, which would have placed requirements on companies to be forthright about the terms and conditions and exit options for their subscriptions. Since that time, the agency has become a less independent part of the executive branch and in May, it delayed enforcing some parts of this rule to July 14. Today, the entire plan appears to be dead in the water after judges in the US Eighth Circuit Court of Appeals decided to vacate the rule. The "click to cancel" rule, which was officially named the Negative Option Rule, drew appeals from industry associations and individual businesses. These parties argued the FTC had failed to follow correct procedures and conduct an analysis before issuing the rule. The judge panel has agreed with them. "While we certainly do not endorse the use of unfair and deceptive practices in negative option marketing, the procedural deficiencies of the Commission's rulemaking process are fatal here," the ruling reads. "Vacatur of the entire Rule is appropriate in this case because of the prejudice suffered by Petitioners as a result of the Commission's procedural error." The judges may not endorse those actions, but it looks like for the foreseeable future, businesses will be able to keep taking them without consequences.
The Hill
08-07-2025
- Business
- The Hill
Appeals court voids FTC's ‘click to cancel' rule just before it starts
The Federal Trade Commission's (FTC) 'click-to-cancel' rule was struck down by an appeals court on Tuesday, just days before it was set to take effect. The rule, announced in October 2024, would have required sellers to make it 'as easy for consumers to cancel their enrollment as it was to sign up.' But the U.S. Court of Appeals for the Eighth Circuit said the FTC erred in its rulemaking process by failing to produce a preliminary regulatory analysis, a statutory requirement for rules whose annual effect on the national economy would exceed $100 million. The FTC had argued that it was not required to prepare the preliminary analysis because its initial estimate of the rule's impact on the national economy was under the $100 million threshold — even though ultimately the presiding officer determined the impact exceeded the threshold. The court disagreed, siding with the petitioners and vacating the rule. 'While we certainly do not endorse the use of unfair and deceptive practices in negative option marketing, the procedural deficiencies of the Commission's rulemaking process are fatal here,' the court's opinion read. The FTC declined to comment. The regulation was part of the FTC's review of the Negative Option Rule, aiming to combat unfair or deceptive practices related to subscriptions, memberships, and other recurring payment programs in the digital economy. It came as more major media and tech companies — such as Netflix, Disney and Warner Bros. Discovery — worked to shore up their businesses around streaming and sought to reduce the number of subscribers who canceled their subscriptions shortly after signing up.
