April 17, 2023

A Checkbox for Subscription Signups May Be The Best Practice

Proposed FTC update to negative option rule

In March 2023, the FTC issued a proposed rule to update the 1973 Negative Option Rule.

"Negative option" is the term the FTC prefers to describe a subscription.

The “negative” part of “negative option” refers to a customer's failure to take an affirmative action to reject an offer or to cancel an agreement as consent for the seller to continue to charge the customer for goods and services.

If the customer fails to cancel a subscription, subscription fees continue indefinitely.

The proposed FTC rule would significantly impact how subscription sellers record "consent" to participate in a subscription (negative option) offer (among other challenging requirements).

So, is a checkbox required?

One big question with the proposed rule is whether a checkbox is required to record signups for subscription offers.

The short answer is no; subscription sellers will not be required to provide a checkbox.

However, there are some related considerations that point to using a checkbox even though a checkbox is not required, including, but not limited to, the following:

• The FTC stated that a checkbox used correctly would be "deemed in compliance" with consent requirements;
• Vermont does require a checkbox; and
• It may be easier to comply with the required subscription disclosures if you use a checkbox.

For more information on the proposed Negative Option Rule, including the checkbox issue, visit Online Subscriptions - FTC Enforcement Escalates With "Dark Patterns" & Game Changer Proposed Rule

Takeaway

The FTC is cracking down on subscription offers.

The FTC is focusing on:

• The process of obtaining informed consent for the signup, and
• Making it easy to cancel the subscription.