Auto Renewal and Subscription Compliance

By Hank FasthoffJuly 6, 2026

The Federal Baseline

The Restore Online Shoppers' Confidence Act applies to goods or services sold through an internet transaction with a negative option feature. 15 U.S.C. § 8403 prohibits a seller from charging or attempting to charge a consumer unless three things occur. The seller must clearly and conspicuously disclose all material terms before obtaining billing information, obtain express informed consent before charging, and provide simple mechanisms to stop recurring charges.

Material terms depend on the offer. They generally include that charges will recur, the amount or method for calculating the charge, billing frequency, and the length of any trial or promotional period. They also include when the first paid charge will occur, how the consumer can cancel, and any deadline that affects cancellation. You should place those terms next to the consent request and use a separate unchecked control that identifies the recurring charge.

ROSCA doesn't prescribe a universal confirmation form, reminder schedule, or record retention period. State laws often supply those requirements. You should preserve the offer presented, the consumer's affirmative action, the date and time of consent, the confirmation, each required notice, and the cancellation history.

Federal Enforcement

A federal court entered the FTC's Amazon Prime settlement order on September 25, 2025. The order requires a $1 billion civil penalty, $1.5 billion for consumer refunds, disclosure of the material enrollment terms, an unambiguous way to decline Prime, and cancellation through the same method the consumer used to enroll. The Amazon order binds Amazon, while the size and terms of the settlement show the consequences of deficient consent and obstructive cancellation.

A federal court entered the Instacart stipulated order on January 13, 2026. It requires $60 million for consumer refunds and resolves allegations that Instacart failed to disclose all material membership terms before obtaining billing information and charged consumers for annual memberships after free trials without express informed consent. The order requires disclosure of the material terms and express informed consent for covered subscription transactions.

The FTC's pending LA Fitness case alleges violations of ROSCA and Section 5 of the FTC Act. According to the amended complaint, consumers faced restricted in person cancellation, mail requirements, unavailable personnel, and rejected requests by phone or email. The complaint states allegations that remain subject to adjudication.

The orders and complaint don't replace the governing statutes, and an order against one defendant doesn't establish a universal procedure for every seller. They show how the FTC applies disclosure, consent, and cancellation requirements to actual enrollment flows.

The Current Negative Option Rule

The FTC amended the Negative Option Rule in 2024 to address a broader range of negative option practices. On July 8, 2025, the Eighth Circuit vacated the amended rule in Custom Communications, Inc. v. FTC, 142 F.4th 1060. The court held that the FTC failed to conduct the preliminary regulatory analysis required after the administrative law judge found that the rule would have an annual effect on the national economy of at least $100 million.

After the Eighth Circuit's vacatur, the original rule remains in place. That rule applies to prenotification plans in which a seller announces merchandise it plans to send. The subscriber must reject the selection to avoid receiving and paying for it. The rule doesn't regulate every subscription or continuity plan.

On March 11, 2026, the FTC announced a new advance notice of proposed rulemaking. The notice requested public comment on whether the agency should retain the current rule, adopt parts of the vacated rule, use other provisions, or pursue alternatives to regulation. The comment period closed April 13, 2026, and the notice proposed no regulatory text.

The vacated provisions aren't current federal requirements under the Negative Option Rule. ROSCA, Section 5 of the FTC Act, the Telemarketing Sales Rule, the original prenotification rule, and state statutes continue to apply within their respective scopes. State law may independently require procedures similar to provisions that appeared in the vacated federal rule.

California

California's Automatic Renewal Law applies to automatic renewal and continuous service offers made to consumers in California. Amendments that govern contracts entered into, amended, or extended on or after July 1, 2025, expanded the requirements for disclosures, consent, records, reminders, fee changes, and cancellation. Business and Professions Code § 17602 contains the principal duties.

Before enrollment, a business must present the offer terms clearly and conspicuously near the request for consent. The statute requires affirmative consent to the agreement and express affirmative consent to the renewal or continuous service terms. A retainable acknowledgment must include the offer terms, cancellation policy, and cancellation information.

The business must keep verification of consent for at least three years or one year after the contract ends, whichever period is longer. A consumer who accepts online must be able to cancel entirely online through a prominently located direct link or button, or through an immediately accessible termination email that requires no additional information. Authentication is permitted for an account holder, but an offline method must remain available when the consumer can't or won't authenticate online.

California uses several notice schedules. A trial or promotional price lasting more than 31 days generally requires notice three to 21 days before that period expires. An initial term of at least one year generally requires notice 15 to 45 days before renewal. A fee change requires notice seven to 30 days before it takes effect, and annual automatic renewal agreements and continuous service agreements require annual reminders.

The cancellation system may present a retention offer only while allowing immediate cancellation. Telephone representatives must process a request promptly after the consumer states an intent to cancel. During an online retention offer, the cancellation link or button must remain prominent, continuously visible, and next to the offer.

New York

New York General Business Law § 527-a requires disclosure of the material terms before the business requests consent or billing information, affirmative consent before charging, and a retainable notice after consent. Cancellation must be simple, at least as easy as consent, and available through the same medium and through the methods the business uses to accept consent.

For an initial paid term of at least one year that renews for at least six months, the business must send a renewal notice 15 to 45 days before the cancellation deadline. A material change, including a price increase, requires notice at least five business days and no more than 30 days before the change. Before charging an increased price, the business must either obtain affirmative consent to the increase or allow cancellation for at least 14 days after the charge and refund the unused portion of the term on a pro rata basis. A free gift or trial lasting more than one month requires notice three to 21 days before the cancellation deadline for the first paid period.

Illinois

Illinois's Automatic Contract Renewal Act requires disclosure of the renewal terms near the consent request, consent before charging, and a retainable acknowledgment with cancellation information. A free trial or promotional period lasting at least 15 days requires notice at least three days before the cancellation deadline.

A consumer contract with a term of at least 12 months that renews for more than one month requires written notice 30 to 60 days before the cancellation deadline. A consumer who accepts an offer online must be able to terminate it entirely online. A violation constitutes an unlawful practice under the Illinois Consumer Fraud and Deceptive Business Practices Act. A consumer who suffers actual damage may bring an action under that Act, and a court may award reasonable attorney fees and costs to the prevailing party.

Minnesota

Minnesota Statutes § 325G.57 requires disclosure of the offer terms near the proposal before acceptance and a retainable confirmation after consent. The confirmation must include the offer terms, free trial cancellation information when applicable, and termination options that are easy to use, cost effective, and timely.

A free trial lasting more than 30 days requires notice five to 30 days before it ends. Continuous service agreements require notice at least once each calendar year. If the seller has a website with profile or subscription management functions, § 325G.60 requires a clear and conspicuous online termination control that asks only for information needed to process the request.

Free Trial Conversions

A free trial that becomes a paid subscription requires a prominent explanation of the conversion, the price or method for calculating it, the first charge date, and the cancellation process. ROSCA requires material disclosures before the seller obtains billing information and express informed consent before the seller charges the consumer. State law may also require a reminder before the trial or promotional period ends.

The confirmation should repeat when the trial ends, when the first charge will occur, the charge amount or calculation method, and how to cancel before payment. A reminder must use the timing and delivery method required for the consumer's state and the specific offer.

Enrollment and Cancellation Controls

Your enrollment record should preserve the terms displayed beside the consent request and the consumer's separate affirmative action. The confirmation should remain easy to save and should repeat the recurring terms, cancellation policy, and available cancellation methods.

Your cancellation process should satisfy the strictest applicable channel rule without forcing every consumer through an unnecessary retention sequence. Repeated offers, required surveys, hidden controls, unavailable personnel, and extra authentication unrelated to the account increase enforcement and litigation risk. The system should record the request, the time received, the account status, the effective date, and the date recurring charges stopped.

Notice schedules require more than one nationwide timer. You should map each offer to the consumer's state, the initial term, the renewal term, the trial or promotional period, the charge frequency, and any planned fee change. Product and payment changes should trigger a new review of the enrollment screen, confirmation, notices, and cancellation process.

Records and Review

A defensible file includes the offer version, consent record, confirmation, renewal notices, trial notices, fee change notices, cancellation requests, refunds, and account history. Your review should also account for sector rules that govern products such as telecommunications, financial services, insurance, health clubs, and utilities.

Recurring billing compliance depends on each stage of the transaction. The disclosures, consent, confirmation, notices, cancellation controls, and records should describe the same offer and remain consistent from enrollment through the final charge.