ESA: FTC’s click-to-cancel rule 'imposes unnecessary and unlawful burdens’

DALLAS—The Electronic Security Association (ESA) is steadfast in its opposition to the Federal Trade Commission’s (FTC’s) newly adopted click-to-cancel rule, which allows consumers to cancel subscriptions more easily.  

On Oct. 22, 2024, ESA filed a petition with the U.S. Court of Appeals for the Fifth Circuit to block the rule, which was announced on Oct. 16, and which requires sellers to offer subscribers “a way to cancel that’s as quick and easy as it was to sign up,” according to the commission. 

“We are proud to go to bat on behalf of our members and customers,” said Kevin Stone, ESA’s newly elected chairman. “We are confident that the courts will set aside the FTC’s click-to-cancel rule. It imposes unnecessary and unlawful burdens on America’s electronic security and life safety companies. Auto-renewing subscriptions give residential and commercial customers peace of mind in knowing that their security and life safety services will continue uninterrupted until customers choose to cancel the service.” 

ESA filed the petition jointly with the NCTA – The Internet & Television Association and the Interactive Advertising Bureau, saying the rule is “arbitrary, capricious, and an abuse of discretion.” 

The click-to-cancel rule – officially tabbed the Negative Option Rule – states: 

a) Important information must be truthful, clear, and easy to find.  

b) People have to know what they’re agreeing to before they sign up 

c) Sellers have to be able to show that people knew what they agreed to before they signed up 

d) There always has to be a way to cancel that’s as quick and easy as it was to sign up 

ESA, however, believes the rule makes auto-renewing subscriptions more complicated and expensive, raises concerns of liability and will lead to interrupted service and higher prices for customers. 

“We are not a jelly-of-the-month club, or some exotic gym membership hoping to trick consumers and lock them in for a long contract,” said Jake Braunger, ESA’s vice president of advocacy and public affairs. “If a mistake is made in canceling those contracts through a click-to-cancel method, everything is fine. If a mistake is made and someone doesn’t know their security and life safety contract was cancelled there could be destruction of property, or even loss of life.”