The laws that govern auto-renewal (US and UK, 2026)

The FTC's Click-to-Cancel Rule (16 CFR Part 425) was finalised on 15 October 2024 under FTC Chair Lina Khan's tenure. It would have expanded the FTC's longstanding "Negative Option Rule" to cover nearly all subscription and auto-renewal offerings in commerce. It never came fully into force: on 8 July 2025, days before its 14 July 2025 compliance deadline, the US Court of Appeals for the Eighth Circuit vacated the rule in its entirety (Custom Communications, Inc. v. FTC).

The court did not reach the merits. It vacated the rule on procedural grounds: the FTC failed to produce a preliminary regulatory analysis, which is required for any rule with an estimated annual economic impact above $100 million (an FTC administrative law judge had found the compliance burden would exceed that threshold). Because the defect went to the rulemaking process itself, the whole rule fell rather than any single provision.

What the rule would have required (now unenforceable, for reference): (1) cancellation "at least as easy" as the signup method; (2) annual renewal reminders for subscriptions longer than one year; (3) clear disclosure of all material terms before billing information is collected; (4) affirmative consent for auto-renewal enrolment, separate from general terms acceptance.

What governs auto-renewal now: the Restore Online Shoppers' Confidence Act (ROSCA), Section 5 of the FTC Act (unfair or deceptive acts and practices), and -- most importantly for consumers -- state automatic-renewal laws, several of which are stricter than the vacated federal rule and remain fully in force (see California and New York below). The FTC submitted a draft Advance Notice of Proposed Rulemaking to revive a negative-option rule on 30 January 2026, published it for public comment on 11 March 2026 (comment period closed 13 April 2026), and is now reviewing comments; any replacement rule is years from taking effect.

California's Automatic Renewal Law is among the strictest in the United States and applies to any business offering auto-renewing subscriptions to California residents, regardless of where the business is incorporated. The 2024 amendment (AB 2863, signed by Governor Newsom) tightened the rules further and applies to contracts entered into, amended, or extended on or after 1 July 2025. With the federal Click-to-Cancel Rule vacated, California's law is now one of the strongest cancellation protections actually in force in the US.

Key requirements: "clear and conspicuous" disclosure of auto-renewal terms before accepting payment, affirmative consent separate from general terms, same-medium ("click to cancel") cancellation for services sold online -- if you can sign up online, you must be able to cancel online without obstruction, renewal and price-change reminders, and consent recordkeeping (AB 2863 also extends coverage to free-trial / free-to-pay conversions).

Remedies include: a private right of action, statutory damages, actual damages, attorney fees. Class actions are expressly available, and the ARL has driven a sustained wave of California auto-renewal class actions against subscription businesses, with several recent settlements in the multi-million-dollar range.

New York's Automatic Renewal Law applies to any contract with a New York consumer and has a notable advance-notice requirement: for subscriptions over $50 per year, vendors must send a renewal reminder 15-45 days before the renewal date. This is stricter than the FTC rule's annual-only requirement and catches monthly contracts that meet the annual threshold.

Key provisions: "clear and conspicuous" auto-renewal disclosure in the initial offer, renewal reminder 15-45 days before renewal for contracts over $50/yr, cancellation mechanism as easy as signup (codified into NY law ahead of the FTC rule). A private right of action is available, and the AG's office actively enforces.

The Digital Markets, Competition and Consumers Act 2024 received Royal Assent on 24 May 2024. The subscription-contract provisions (Part 4) commenced on a staggered schedule through 2026 and represent the UK's most comprehensive regulation of auto-renewal and subscription contracts to date.

Key provisions: reminder notices required before each billing period for subscription contracts, a 14-day cooling-off right after any automatic renewal, a clear and straightforward cancellation route (online, accessible from within the service), and a broad definition of "subscription contract" that captures most recurring digital and physical service arrangements.

Enforcement: the Competition and Markets Authority (CMA) enforces the Act. Unlike the US approach, there is no private right of action under the DMCC Act -- enforcement runs through the CMA, which can impose fines of up to 10% of global annual turnover for breach. The CMA opened an investigation into subscription practices in the fitness and media sectors in early 2026.

Interaction with the Consumer Rights Act 2015: the CRA's unfair contract terms provisions continue to apply alongside the DMCC Act. Clauses that unreasonably limit cancellation rights may still be challenged under the CRA.

If you are in the US: the federal Click-to-Cancel Rule was vacated in July 2025, so your strongest tools are now your state's automatic-renewal law plus ROSCA and Section 5 of the FTC Act. In states like California and New York, most renewal traps still require clear and conspicuous disclosure. If the disclosure was not clear and conspicuous -- if the rack rate was buried in terms, not shown next to the price -- the renewal may be legally challengeable. The practical first step is a chargeback (see cancel and resign) plus a complaint to your state AG.

If you are in the UK: the DMCC Act's reminder and cancellation provisions give you strong tools. If a vendor fails to send the required reminder or makes cancellation unreasonably difficult, a complaint to the CMA is appropriate and the FCA's guidance on subscription fees applies to financial services.

This page is a summary for general information purposes. Consult a qualified attorney for your specific situation. Laws change; this page was last verified June 2026.