If your business offers subscriptions, memberships, or recurring billing, you need to be aware of the FTC’s new Negative Option Rule which is set to go into effect July 14, 2025. While it may sound complicated, the goal is simple: make it easy for customers to understand what they’re signing up for — and just as easy to cancel.
What Is the Negative Option Rule?
The rule covers any billing arrangement where customers are automatically charged unless they cancel. This includes:
- Fitness centers
- Coaching programs
- Monthly services
- Subscription boxes
- Software memberships
- Any automatic recurring billing
The updated rule focuses on three main areas:
- Clear disclosure. Customers must see all key terms — pricing, frequency, renewal dates, and cancellation options — before entering billing information.
- Affirmative consent. Customers must actively agree to the terms.
- Simple cancellation. If customers sign up online, they must be able to cancel online — without calling, sending emails, or jumping through hoops.
Why This Matters for Small Businesses
This isn’t just aimed at big companies. Small businesses also need to comply, or risk civil penalties of up to $53,000 per violation.
Many businesses may need to:
- Review subscription sign-up forms
- Update terms of service and privacy policies
- Simplify cancellation processes
- Ensure transparency in billing practices
Clear Processes Build Trust
While these new rules carry serious penalties, they also reflect a simple truth: customers want straightforward, honest transactions. Making your subscription process simple and transparent not only keeps you compliant, but also builds long-term trust and stronger relationships.
The Bottom Line
Keeping your marketing and customer experience simple and transparent isn’t just good business, it’s becoming the law. The good news? Small improvements now can protect your business and give your customers the confidence to stick around.
Do you prefer to listen in? Here’s our podcast:
Links in this episode: ‘Silence Isn’t Subscribing,’ According to New FTC Rules… and Common Sense
The FTC’s Negative Option Rule: Complying with the 2025 Amendments
