Auto renewal laws: what ROSCA, California and the click-to-cancel ruling mean for subscriptions

Auto renewal laws govern any offer that keeps charging unless the buyer cancels. Federally, ROSCA requires three things for online sales: disclose all material terms before taking billing details, get express informed consent before charging, and provide a simple way to stop the charges. States add their own rules: California's, amended for contracts from July 1, 2025, requires online cancellation and advance notices.

What are auto renewal laws?

An auto renewal offer, which the FTC calls a negative option, keeps charging until the buyer acts to stop it. For a supplement brand that means subscribe-and-save plans, monthly continuity shipments, and trials or discounted first bottles that turn into full-price shipments. California's statute names three versions: an automatic renewal (a paid plan that renews at the end of a set term), continuous service (a paid plan that continues until the consumer cancels) and a free-to-pay conversion (a free period that becomes paid unless the customer cancels first).

Three layers apply to US buyers. ROSCA is the federal statute for online negative option sales. Section 5 of the FTC Act bans deceptive and unfair practices in every sale. And state laws add their own duties for buyers in that state; California's is the example in this post. A federal rule meant to add a fourth layer was struck down in 2025. The dates that set today's rules:

Auto renewal rules, date by date

1. Dec 29, 2010ROSCA becomes lawPub. L. 111-345, now 15 U.S.C. 8401-8405.
2. Oct 16, 2024The FTC announces its click-to-cancel ruleApproved 3-2. Canceling was to be as easy as signing up.
3. Jul 1, 2025California's amendments applyTo contracts entered into, amended or extended from this date.
4. Jul 8, 2025The Eighth Circuit vacates the click-to-cancel ruleCustom Communications, Inc. v. FTC, No. 24-3137.
5. Sep 25, 2025Amazon settles ROSCA charges$1 billion civil penalty plus $1.5 billion for consumers.
6. Mar 11, 2026The FTC asks whether to write new rulesAn advance notice of proposed rulemaking on negative option marketing.

What does ROSCA require?

The Restore Online Shoppers' Confidence Act makes it unlawful to charge for goods or services sold online through a negative option feature unless the seller does three things (15 U.S.C. 8403):

1. Clearly and conspicuously discloses all material terms of the transaction before obtaining the buyer's billing information.
2. Obtains the buyer's express informed consent before charging their card or account.
3. Provides simple mechanisms for the buyer to stop recurring charges.

The statute doesn't list the material terms, so read your offer as a buyer would. For a supplement subscription that means at least: that it is a subscription, what each shipment costs, how often you charge, when the first full-price charge happens after a trial or discount, any minimum commitment, and how to cancel. A terms line that covers them (fictional):

ROSCA violations are treated as violations of an FTC trade regulation rule (15 U.S.C. 8404), which is what makes civil penalties available on top of refunds. For scale: in September 2025, Amazon agreed to pay a $1 billion civil penalty and $1.5 billion in consumer redress to settle FTC allegations under ROSCA and the FTC Act that it enrolled millions of people in Prime without their consent and made canceling hard. The order requires a clear button to decline Prime, clear disclosure of the terms and an easy way to cancel (FTC). The FTC called it the largest civil penalty ever in a case involving an FTC rule violation.

What happened to the FTC's click-to-cancel rule?

On October 16, 2024, the FTC approved amendments to its Negative Option Rule by a 3-2 vote. They would have required sellers to make canceling as easy as signing up, with most provisions applying 180 days after publication (FTC). On July 8, 2025, the Eighth Circuit vacated the entire rule in Custom Communications, Inc. v. FTC (opinion). The court held that once an administrative law judge had found the rule's effect on the economy would pass $100 million, the FTC had to issue a preliminary regulatory analysis, which it hadn't done.

So the rule is no longer in force. On March 11, 2026, the FTC issued an advance notice of proposed rulemaking that asks whether and how it should address negative option marketing. Keeping the current rule, adopting provisions of the vacated 2024 rule, other provisions and non-regulatory options are all on the table (FTC).

For a seller, the practical answer hasn't changed much. ROSCA still requires a simple way to stop charges, the FTC Act still bans deceptive enrollment, and California already requires online cancellation for buyers who sign up online. Making cancellation as easy as sign-up costs little and covers all three.

Here is what is gone and what still applies:

Click-to-cancel after the ruling

As of October 2026

VacatedThe 2024 click-to-cancel rule

Approved 3-2 by the FTC on October 16, 2024. The Eighth Circuit vacated the entire rule on July 8, 2025.

• Canceling was to be as easy as signing up
• Most provisions were to apply 180 days after publication

In March 2026 the FTC asked for comments on whether and how to write new rules.

In forceWhat still applies

• ROSCA still requires a simple way to stop charges
• The FTC Act still bans deceptive enrollment
• California already requires online cancellation for buyers who sign up online

Making cancellation as easy as sign-up costs little and covers all three.

California's auto renewal law after July 1, 2025

California's Automatic Renewal Law (Business and Professions Code section 17600 and following) applies to businesses that make automatic renewal or continuous service offers to a consumer in the state. Amendments from AB 2863 apply to contracts entered into, amended or extended on or after July 1, 2025. The Attorney General summarized the stronger rules in a consumer alert on September 4, 2025, noting that the AG's office and district and city attorneys enforce them (California AG).

Save offers are allowed, within limits. Online, a discount or retention offer must appear beside a prominently placed, continuously displayed "click to cancel" link or button, and a click on it must cancel promptly. On the phone, you must first tell the consumer they can finish canceling at any time by saying "cancel".

The annual reminder needs care. The statute applies it to "an annual automatic renewal agreement or continuous service agreement", while the Attorney General's alert describes it more broadly. Ask counsel how it applies to a monthly plan; a yearly reminder to every subscriber costs little either way.

Free trials and discounted first orders

A free bottle that rolls into paid shipments is a free-to-pay conversion, and California adds duties for it. If the offer includes a free gift or trial, it must explain clearly the price that will be charged once the trial ends. The acknowledgment must explain how to cancel before the buyer pays, and the buyer must be able to cancel before paying. A discounted first order counts too: the consent rule covers limited-time promotional prices, and if a free or promotional period lasts more than 31 days, the notice goes out 3 to 21 days before it ends.

What does a compliant subscription checkout look like?

Put the rules together and a compliant flow has five touchpoints. The VSL makes the offer, the checkout takes consent, the confirmation email records it, reminders arrive before charges the buyer might not expect, and cancellation is one click away. Here is the same subscription offer built two ways:

One subscription offer, built two ways

Lower riskBuilt to comply

• Price, frequency and "until you cancel" said in the video and printed by the button
• An unchecked box: "Send me a bottle every 30 days for $39 until I cancel"
• A confirmation email with the terms and a cancel link
• Reminders before a trial ends, a renewal or a price change
• A cancel button in the account that works at once

High riskBuilt to trap

• "Subscribe and save" with the monthly charge only in the footer terms
• A pre-checked box, or an order bump that quietly adds a subscription
• Terms only behind a link at checkout
• No email until the card is charged
• Cancel by phone only, through retention loops

The confirmation email does double duty: it is California's acknowledgment and your best record of what the buyer agreed to. A version that covers the required points (fictional):

Two practical notes. First, check both halves of the funnel. RevvyScales hosts the VSL page, not the checkout, which stays on your own platform (Shopify, Whop, CartPanda or any checkout that reports the sale back), so the consent box and the terms beside the payment fields live there. Second, the legal footer on a RevvyScales page can hold your disclaimer, privacy policy and terms of service (legal footer). A footer link is not a clear and conspicuous disclosure, though: the price, the frequency and how to cancel belong next to the button.

The same rules apply to one-click upsells and order bumps that add a subscription; the terms and the consent have to be there too. Our upsell funnel guide covers building them cleanly, and "free" trial offers carry extra disclosure rules covered in our post on free plus shipping.

Why surprise renewals turn into chargebacks

A buyer who doesn't recognize a renewal charge often goes to the bank instead of to you. Each dispute costs the sale, a fee and a mark on your dispute ratio, and processors watch that ratio. Our post on chargeback ratios explains how Visa and Mastercard count disputes.

The math is unforgiving at subscription volumes. Say 2,400 renewal charges go through in a month and 14 are disputed: a 0.58% dispute ratio, or 5.8 per 1,000 transactions. At that volume, each dispute you prevent moves the ratio by about 0.04 percentage points. Try your own numbers:

Calculator

Dispute ratio calculator

Card disputes (chargebacks) against card transactions in the same month.

Card transactions this monthDisputes this month

Dispute ratio

0.58%

Disputes per 1,000 transactions

5.8

Card networks and processors each count disputes their own way and set their own limits — your processor’s dashboard is the number that counts for your account.

Reset to the example

The fixes overlap with the law. A reminder before a charge the buyer may have forgotten, a billing descriptor they recognize (billing descriptors) and a refund issued the day it's requested all make a dispute less likely. Our post on reducing chargebacks covers the rest of the prevention stack. When a renewal is disputed anyway, our post on chargeback representment covers answering it with the evidence its reason code needs.

A pre-launch checklist for subscription offers

Run this before the offer goes live, and again after any change to the price, the trial or the checkout.

Subscription offer checklist

• The video states the recurring price, how often you charge and "until you cancel"
• The same terms sit in text next to the order button and above the payment fields
• Consent is an unchecked box or a separate click, worded with the price and frequency
• No pre-checked box, order bump or upsell adds a subscription silently
• The confirmation email repeats the terms and links to cancellation
• Trial-end, renewal and price-change notices go out on the California schedule
• Online sign-ups can cancel online in one step, through the same channel they used to join
• Any save offer sits beside a cancel button that stays on screen
• Proof of consent (terms shown, time, box ticked) is kept for at least three years
• Someone on the team tests cancellation every month

0 of 10 done

Then check the rest of the funnel, from claims to testimonials, against our VSL compliance guide.