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When the FTC's "Click to Cancel" Rule (otherwise known as the revised Negative Option Rule), was in litigation in July 2025, we predicted the FTC was likely to instead focus on enforcing the Restore Online Shoppers Confidence Act (ROSCA) to address allegedly unfair or deceptive subscription cancellation policies. Recent enforcement actions brought by the agency show the FTC's emphasis on cancellation policies continues. And the FTC's litigation against health club chain LA Fitness, and recent $7.5 million settlement with education technology company Chegg, Inc., show these issues cut across industry lines.
Key takeaways and best practices
- Enforcers will be focused on whether cancellation processes are simple, easy to find, and no more onerous than the process to sign up.
- Even brick-and-mortar stores and in-person service providers should provide simple cancellation mechanisms for customers who sign up online.
- High volumes of customer complaints may signal compliance issues and can elevate enforcement risk.
- Violations of ROSCA are subject to civil penalties up to $53,088 per violation.
- State enforcement is increasing as well, with requirements varying by state.
Recent FTC enforcement
The FTC on September 16 announced a settlement with Chegg to resolve allegations the company violated ROSCA and the FTC Act by failing to provide simple mechanisms to stop recurring charges. Chegg rents digital textbooks to students and offers online subscription services including study tools, homework help, and writing assistance, primarily for high school and college students.
The FTC alleged Chegg violated ROSCA's requirement that cancellation mechanisms be "simple" by requiring consumers to navigate through multiple links to locate the cancellation page, after which they had to again navigate through a number of steps. The FTC also alleged that Chegg charged nearly 200,000 customers after they had requested cancellation, and that Chegg was aware of many of these issues based on a high volume of consumer complaints.
The settlement included a $7.5 million judgment and an injunction requiring that Chegg provide simple cancellation mechanisms that are as easy to use as the mechanism the consumer used to sign up. The settlement also requires Chegg to maintain records for 10 years related to its subscription services and cancellation policies, and it provides for permanent compliance monitoring by the FTC.
In another recent enforcement action, the FTC sued LA Fitness on August 20 for allegedly violating ROSCA and Section 5 of the FTC Act. According to the FTC complaint, the company enrolls consumers in memberships and other subscription features, including through online sign-up that triggers coverage under ROSCA, but fails to provide a simple cancellation mechanism. The FTC alleged that both in-person and regular mail cancellation procedures were unduly complex. For in-person cancellation, the FTC alleged that the company required customers to print a specific form from that was difficult to find on the company website and deliver it to a specific manager during limited weekday hours. Consumers who attempted to cancel by mail were allegedly required to send the requests via certified mail and misinformed that they needed to use a specific cancellation form available through their website login, without being told that submitting written notice of their cancellation request was also an option.
State law complexity and scrutiny is increasing.
Numerous states also have auto-renewal laws that add additional regulatory requirements beyond those imposed by ROSCA. For example, many states require yearly notices before annual subscriptions renew. Other states, including California, impose requirements around methods of cancellation. And at least one state, Minnesota, has begun regulating how companies may offer discounts or incentives to retain customers seeking to cancel services. In many states violations of automatic renewal statutes can be pursued through a private right of action.
California's Automatic Renewal Law is especially noteworthy, as a group of California counties and cities have begun joint enforcement efforts through the California Auto Renewal Task Force (CART). On August 18, 2025, CART announced a $7.5 million settlement with a meal kit delivery company that allegedly failed to clearly disclose subscription terms before collecting payment, charged customers credit cards without their affirmative consent, provided inadequate post-transaction acknowledgments and lacked an easy cancellation mechanism.
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With multiple enforcers at the state and federal level focused on automatic renewal, subscription services, and cancellation plans, companies should consider reviewing their policies. For more information, please contact one of the authors. Wiley's FTC and Consumer Protection team has a deep bench of attorneys with experience with FTC and state AG consumer protection enforcement and compliance.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
