Glossary
Auto-Renewal Subscription
A subscription that renews and charges you automatically at the end of each term unless you cancel. Federal and state laws require clear disclosure, consent, and a way to cancel.
An auto-renewal subscription keeps charging your card each month or year until you cancel. Streaming services, gyms, software, meal kits, and memberships commonly use it. Regulators call these arrangements "negative option" plans, because your silence is treated as agreement to keep paying.
The rules are split between federal and state law. At the federal level, the Restore Online Shoppers' Confidence Act requires clear disclosure of terms, express consent before charging, and a simple way to stop recurring charges for online sales. The FTC also adopted a broader "click to cancel" rule, but on July 8, 2025, the Eighth Circuit vacated the FTC's click-to-cancel rule on procedural grounds in Custom Communications, Inc. v. FTC, days before it was set to take effect.
State laws remain in force. California's Automatic Renewal Law, in Business and Professions Code section 17602, makes it unlawful to charge for an automatic renewal without first presenting the terms clearly, obtaining the consumer's express affirmative consent, and giving an acknowledgment that explains how to cancel. Many other states have similar statutes.
Class actions over auto-renewals usually allege hidden terms, charges after a "free trial" without proper consent, or cancellation processes that were made deliberately hard. Refunds often cover the renewal charges. Save the sign-up confirmation and any cancellation attempts. See the YouTube TV auto-renewal settlement, the Amazon Prime FTC settlement, and Amazon lawsuits.
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