Stuck in a Gym Membership Contract? Don’t Worry The Federal Trade Commission Has Your Back

Federal Trade Commission Announces Final “Click-to-Cancel” Rule Making It Easier for Consumers to End Recurring Subscriptions and Memberships

The Federal Trade Commission (FTC) has announced a new “click-to-cancel” rule that will require businesses to make canceling subscriptions (such as gym memberships) as easy as signing up. This final rule, aimed at protecting consumers from deceptive subscription practices, will take effect 180 days after its publication in the Federal Register.

The FTC noted a sharp increase in complaints about subscription practices, especially gym memberships, receiving an average of 70 complaints per day in 2024—up from 42 per day in 2021. The rule aims to curb these issues by providing a consistent legal framework.

Changes Based on Public Feedback, Gym Memberships

After receiving over 16,000 public comments on the proposal, the FTC revised the rule, dropping two provisions:

1. Annual Reminders: Sellers will no longer be required to send annual reminders about subscriptions.
2. Subscription Offers During Cancellation: Sellers can now inform consumers about alternative plans or offers during the cancellation process without prior consent.

Key Provisions of the New Rule

The updated rule will modernize the FTC’s 1973 Negative Option Rule to address deceptive practices in today’s digital economy. Key elements include:

• Truthful Marketing: Prohibiting sellers from misrepresenting material facts about subscriptions.
• Clear Terms: Requiring sellers to provide essential information before collecting payment details.
• Informed Consent: Ensuring consumers agree to subscription terms before being charged.
• Easy Cancellation: Mandating simple cancellation options to stop recurring charges immediately.

FTC Vote and Next Steps

The Commission voted 3-2 to approve the rule, with Commissioners Melissa Holyoak and Andrew N. Ferguson dissenting. Commissioner Rebecca Kelly Slaughter also released a statement supporting the decision, while dissenting statements from Holyoak and Ferguson raised concerns.

The FTC has published a fact sheet summarizing the new rule and will continue its mission to promote fair competition and consumer protection. For more information or to report scams, visit consumer.ftc.gov or ReportFraud.ftc.gov.