The Federal Trade Commission (FTC) is once again seeking public comment on potential amendments to its Negative Option Rule, following a court decision that vacated previous changes. This renewed effort aims to address ongoing consumer complaints regarding recurring payments and difficult cancellation processes for subscription-based goods and services.

FTC Reopens Rulemaking Process

On March 11, 2026, the FTC issued an Advance Notice of Proposed Rulemaking (ANPRM) to revisit its Rule Concerning the Use of Prenotification Negative Option Plans. This action follows the Eighth Circuit’s 2025 decision, which vacated the FTC’s 2024 amendments. The 2024 amendments would have imposed uniform requirements on subscriptions, auto-renewals, and trial-to-pay offers across all marketing channels.

The FTC’s ANPRM acknowledges that negative options are widely offered and can provide benefits to both sellers and consumers. However, the Commission intends to address recurring billing and cancellation frictions that continue to generate a high volume of consumer complaints. Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, stated that negative option subscriptions can offer procompetitive features by lowering transaction costs and ensuring uninterrupted service. However, Mufarrige also noted that the Commission’s enforcement track record suggests these subscriptions continue to be plagued by difficult cancellation processes, unlawful retention tactics, and other impediments that prevent consumers from easily switching or ending services. He added that neither consumers nor competition are protected when consumers are enrolled in programs they do not want or cannot cancel.

The existing Negative Option Rule, first adopted in 1973, specifically addresses prenotification plans, such as "book-of-the-month" style clubs. In these plans, consumers receive periodic notices and are billed for merchandise unless they decline within a set period. The current Rule does not cover continuity programs, automatic renewals, and free-to-pay trial conversions, which are often offered online or via apps. Consequently, the FTC has relied on various authorities, including Section 5 of the FTC Act, the Restore Online Shoppers’ Confidence Act (ROSCA), the Telemarketing Sales Rule, the Electronic Fund Transfer Act, the Postal Reorganization Act, and numerous state auto-renewal laws, to police perceived abuses in these programs. These abuses include inadequate disclosures, enrollment without consent, and difficult cancellation processes.

The FTC is seeking public feedback on whether to change the Negative Option Rule to improve regulations for negative option marketing. This type of marketing, where individuals are charged for products or services unless they cancel or opt out, can be convenient and profitable. However, it often leads to problems when companies conceal important details, charge without consent, or make cancellations excessively difficult. The FTC is reviewing these rules again because many consumers continue to report being charged for items they did not want or agree to keep purchasing.

Proposed Changes and Industry Impact

The proposed amendments would make it easier for consumers to cancel subscriptions and would prohibit businesses from making misrepresentations about their subscription plans. The FTC has received complaints from consumers about the difficulty of canceling recurring subscriptions, with some unable to cancel even after contacting the company, and others being charged for another term after canceling. The proposed rule aims to address these complaints by simplifying the cancellation process.

Key provisions of the proposed rule include requirements for businesses to allow consumers to cancel subscriptions online, by email, or by phone. Businesses would also need to provide clear and conspicuous cancellation instructions and give consumers a reasonable opportunity to cancel before being charged for another term. Additionally, businesses would be prohibited from misrepresenting the terms of their negative option programs and would be required to provide consumers with a copy of their cancellation confirmation.

Noncompliance with these requirements would be considered an unfair or deceptive practice, violating Sections 5 and 19 of the FTC Act, and subject to civil penalties. Currently, this could mean over $50,000 per day for ongoing violations. While these amendments could be a significant victory for consumers, they are also expected to cause substantial challenges for website operators offering subscription-based goods and services. Such changes would likely necessitate significant modifications to a website’s sign-up process, cancellation process, and legal disclaimers.

The FTC has a history of investigating and prosecuting website operators for unfair and deceptive trade practices, including the abuse of negative options, and adult entertainment websites have been among its targets. Former FTC Commissioner Christine Wilson has dissented from the proposed rule, stating that it goes "far beyond practices for which the rulemaking record supports a prevalence of unfair or deceptive practices."

Public Comment Period

The FTC is accepting public comment on the proposed amendments until April 13, 2026. The Commission specifically requests feedback on which small businesses and industries utilize this marketing strategy, and whether the agency should tailor requirements to reduce costs for small businesses. Once the comment period closes, the FTC will review all submissions before making a final decision on whether to adopt the amendments. Businesses offering online products or services on a subscription basis are advised to have their sign-up and cancellation processes reviewed by an attorney experienced with the FTC, including enforcement of the Negative Option Rule.

Corey D. Silverstein, managing and founding member of Silverstein Legal, focuses his practice on representing all areas of the adult industry, including hosting companies, affiliate programs, content producers, processors, designers, developers, and operators. He is licensed in Michigan, Arizona, the District of Columbia, Georgia, and New York.

Key Facts

  • The FTC issued an Advance Notice of Proposed Rulemaking (ANPRM) on March 11, 2026, to revisit the Negative Option Rule.
  • This action follows the Eighth Circuit’s 2025 decision vacating the FTC’s 2024 amendments.
  • The proposed amendments aim to make it easier for consumers to cancel subscriptions and prohibit misrepresentations about subscription plans.
  • Businesses would be required to offer online, email, or phone cancellation options and provide clear instructions.
  • Noncompliance could result in civil penalties exceeding $50,000 per day.
  • The public comment period for the proposed amendments closes on April 13, 2026.