The Eighth Circuit Court of Appeals has annulled the Federal Trade Commission's 'click-to-cancel' rule, which aimed to simplify subscription cancellations by allowing consumers to terminate their subscriptions using the same method as enrollment. The court found significant procedural errors in the FTC's rulemaking process, declaring these deficiencies a fatal flaw. The intended rule was meant to address issues surrounding negative option marketing, which involves automatic recurring charges or subscriptions without explicit consumer consent. The ruling followed rising consumer complaints regarding subscription practices, with a marked increase observed since 2021.
The Eighth Circuit Court of Appeals vacated the Federal Trade Commission's 'click-to-cancel' rule, citing procedural failures in the rulemaking process.
The court emphasized that the procedural deficiencies of the Commission's rulemaking process are fatal for the new ruling, leading to the decision to vacate the entire Rule.
The ruling would have mandated that companies allow consumers to cancel subscriptions through the same method used for enrollment, aiming to combat negative option marketing practices.
Nearly 70 consumer complaints about subscription practices are submitted daily, indicating a significant increase in reported issues.
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