Can I Get Sued for Making It Hard to Cancel a Subscription?

You added one more screen to your subscription cancellation flow.

The goal was simple. Give customers one last discount, suggest a cheaper plan, or remind them what they will lose by cancelling.

It worked.

More customers stayed.

Now you’re wondering whether that extra screen could create a legal problem.

That concern is justified.

The FTC’s formal Click-to-Cancel rule was vacated by a federal appeals court in 2025. But that did not make difficult cancellation practices legal. The FTC has continued pursuing companies under existing federal laws, while also working toward a new formal rule.

For subscription businesses, the practical takeaway is straightforward: a cancellation flow designed primarily to prevent customers from leaving can create legal exposure even without the original Click-to-Cancel rule.

The Click-to-Cancel Rule Was Vacated. The Risk Wasn’t.

The Eighth Circuit vacated the FTC’s Click-to-Cancel rule in mid-2025, citing procedural defects rather than deciding that difficult cancellation practices were lawful.

That distinction matters.

The FTC can still pursue conduct it considers unfair or deceptive under Section 5 of the FTC Act. Subscription businesses may also be subject to the Restore Online Shoppers’ Confidence Act (ROSCA), which addresses negative-option and automatic-renewal billing practices.

So a founder should not look at the vacated rule and conclude that cancellation friction is now safe.

The specific rule may be gone.

The underlying regulatory exposure remains.

What Does This Mean for Your Cancellation Flow?

Focus on a practical problem that many growing subscription businesses face.

The cancellation process starts simple.

Then the growth team adds another retention offer.

Then another confirmation screen.

Then a requirement to speak with customer support.

Then the cancellation button becomes harder to find.

Each change may appear small on its own.

Together, they can create a cancellation process that is significantly more difficult than the signup experience.

The legal question is not simply whether your company technically allows cancellation.

It is whether the overall process creates an unfair or deceptive obstacle for customers trying to end their subscription.

The Uber Case Shows How Serious Enforcement Can Become

The FTC and 21 state co-plaintiffs filed an amended complaint against Uber concerning its Uber One subscription, adding a civil penalty claim. Penalties can reach up to $51,744 per violation.

That is important for smaller subscription companies too.

A business does not need to be a massive technology platform before cancellation practices attract regulatory attention.

The Uber case demonstrates that federal and state authorities can work together when they believe subscription billing and cancellation practices cross the line.

For founders, the lesson is not that every retention offer is unlawful.

It is that cancellation should be treated as a compliance issue, not simply a growth experiment.

A New Formal Rule Is Already Being Considered

The regulatory story is also not finished.

In January 2026, the FTC issued an Advance Notice of Proposed Rulemaking (ANPRM) concerning negative-option marketing practices. An ANPRM is an early formal step in the rulemaking process. It is evidence that the FTC is actively working toward renewed formal requirements around click-to-cancel practices.

That creates an important timing issue for subscription businesses.

You do not need to wait for a new rule to become final before reviewing your cancellation process.

Existing laws are already being used for enforcement.

And future regulations could create additional requirements.

Your Growth Team Should Not Own This Decision Alone

Retention is an important business metric.

But the way you pursue retention matters.

A growth team may reasonably test:

• A discounted plan.
• A pause option.
• A downgrade offer.
• A reminder about unused benefits.

Those strategies are not automatically problematic.

The risk increases when retention experiments make cancellation unnecessarily confusing, hide the cancellation option, or add friction that customers did not face when subscribing.

Don’t allow product and growth teams to add retention screens and extra cancellation steps without legal review.

A simple internal rule can help: any material change to the cancellation journey should receive legal review before release.

Keep Records of What Customers Saw

Another issue founders often overlook is documentation.

You should know what customers were told when they subscribed.

That includes the information they received about:

• Automatic renewal.
• Pricing.
• Renewal terms.
• How they could cancel.

Regulators and state attorneys general may request evidence showing what was disclosed at signup.

If your company cannot reproduce those disclosures, defending the process becomes much harder.

This is particularly important for growing companies whose signup pages, pricing, and cancellation systems change frequently.

Keep records of meaningful changes rather than assuming the current version is enough.

State Laws Can Create Additional Exposure

Federal law is not the only consideration.

Knowing where your subscribers are located and whether applicable states have their own automatic-renewal requirements.

This matters because a subscription business may serve customers across many states without having a physical presence in each one.

Your cancellation and renewal practices may therefore need to account for state-specific requirements as well as federal enforcement.

The more widely your subscription product is sold, the more important this review becomes.

Common Founder Mistakes

• Treating the vacated Click-to-Cancel rule as a green light: The rule was vacated because of procedural defects. That does not eliminate enforcement under existing laws governing unfair, deceptive, and negative-option practices.
• Letting growth teams control cancellation friction without legal review: Retention experiments can become compliance decisions when they change how customers cancel their subscriptions.
• Failing to document signup disclosures: Companies should preserve evidence showing what customers were told about pricing, automatic renewal, and cancellation when they subscribed.
• Ignoring state-specific requirements: Subscription businesses may need to consider the laws of the states where their customers live rather than relying only on a federal compliance analysis.

10-Minute Cancellation Flow Self Check

Before making another change to your cancellation process, ask:

• Can a customer cancel in roughly the same number of steps it took to sign up?
• Do we have a record of the automatic-renewal disclosure shown at signup?
• Has the legal team reviewed every retention screen or offer inserted into the cancellation process?
• Do we know which states our subscribers are located in and whether additional automatic-renewal requirements apply?
• Can we produce a history of material changes made to the cancellation flow?
• Are our pricing, renewal, and cancellation disclosures consistent everywhere customers see them?

If you cannot answer yes to all of these, your cancellation flow is a liability sitting in plain sight.

Bottom Line

The FTC’s Click-to-Cancel rule may have been vacated, but that does not mean subscription businesses can make cancellation difficult without consequences.

The FTC continues to have enforcement tools under existing law, the Uber case demonstrates the potential scale of enforcement, and the agency has already taken steps toward developing a new formal rule.

Founders should therefore focus less on whether a particular regulation is currently in force and more on whether their cancellation process is clear, fair, properly disclosed, and supported by adequate records.

A retention strategy should help customers make an informed choice.

It should not depend on making the exit unnecessarily difficult.

Do You Actually Know What Your Cancellation Flow Discloses and Collects?

Download our free Data Mapping Worksheet to identify where personal information is collected, stored, and transferred throughout your business. Mapping your data before updating your privacy documentation can help ensure your policies accurately reflect how your product actually works.

Get the free worksheet: https://primumlaw.com/data-mapping-worksheet/?post_type=page