On January 14, 2025, the first part of the Federal Trade Commission’s (“FTC”) update to the Negative Option Rule went into effect. Negative options are contract terms that allow a seller to interpret a customer’s silence or failure to affirmatively cancel an agreement as a tacit acceptance of a renewal option—thereby creating automatically renewing contracts. While auto-renewing contracts are often intended to make subscriptions to goods and services easier and more efficient, the FTC’s stated position has been that consumers and other businesses can become “trapped” in contracts that they did not intend to renew and cannot easily cancel.Continue Reading An Offer You Can’t Refuse: The FTC’s New “Click-to-Cancel” Rule
On August 9, 2018, the United States District Court for the Northern District of Alabama agreed with the Second Circuit Court of Appeals decision in Reyes v. Lincoln Auto. Fin. Servs., 861 F.3d (2d Cir. 2017), which held that contractual consent to be contacted by an automatic telephone dialing system (“ATDS”) could not (and cannot) be unilaterally revoked because the consent formed part of a bargained-for exchange in the contract. The Second Circuit’s ruling was favorable for companies seeking clarification on consent revocation issues that exist with respect to claims brought under the Telephone Consumer Protection Act (“TCPA”).