It’s a narrative practically each SaaS buyer has lived via: signing up is a breeze—just some clicks, your bank card quantity, and also you’re in. However if you attempt to cancel? All of a sudden, it’s like attempting to flee a maze. You’re instructed to name a buyer assist line. Or open a ticket. Or worse, navigate a number of screens solely to search out the cancel button buried beneath obscure choices like pause or downgrade.
These irritating experiences haven’t gone unnoticed by the FTC.
The Fee acquired practically 70 shopper complaints per day on common about unfavourable possibility and recurring subscription practices, up from 42 per day in 2021.
Federal Commerce Fee
That pattern and the overwhelming shopper suggestions it generated have led to a big coverage shift that instantly impacts SaaS suppliers and their clients.
Final October, the FTC introduced its ultimate Click on-to-Cancel rule, which requires companies to make it simply as straightforward for shoppers to cancel subscriptions as it’s to enroll in them. The rule, which applies broadly to recurring billing and unfavourable possibility packages, goes into impact 180 days after publication within the Federal Register—that means SaaS corporations seemingly have till this month to conform.
That is greater than a procedural change. It displays a deeper push for equity in how subscription-based providers are marketed, consented to, and in the end exited. Whereas the ultimate rule softened some early proposals, like requiring annual reminders, it nonetheless units strict necessities to reshape how SaaS suppliers handle signups, consent, and cancellations.
What SaaS Suppliers Have to Know
The rule directs software program corporations, particularly these providing trials, freemium upgrades, or month-to-month service plans, to overview and simplify buyer flows. Below the brand new regulation, complexity is not a retention technique—it’s a legal responsibility.
Moderately than repeating the whole contents of the rule, listed here are the important thing takeaways each SaaS supplier ought to act on now:
- Cancellation should be as straightforward as sign-up: If clients can begin their subscription with a couple of clicks in your web site, they need to additionally be capable to cancel it with comparable ease via the identical channel.
- No extra “name to cancel” hurdles: Requiring customers to talk with a rep or undergo an electronic mail or ticketing system to cancel is now a purple flag. Automated and accessible cancellation on-line is the brand new baseline.
- Clear and conspicuous disclosure is required earlier than billing: All key phrases—billing frequency, whole price, cancellation phrases—should be offered clearly earlier than the person inputs fee particulars.
- Knowledgeable consent is necessary for any recurring cost. Clients should actively conform to the unfavourable possibility (e.g., an auto-renewing subscription). Silence, pre-checked packing containers, or obscure language gained’t lower it.
- Retention affords should be non-obligatory: You possibly can nonetheless make a pitch to retain clients, however solely after asking in the event that they wish to hear it. By default, you possibly can’t embed a tough promote into the cancellation course of.
- The rule applies throughout media and sectors: The identical expectations apply whether or not the subscription begins by way of internet, cellphone, cell app, and even print. If you happen to’re promoting recurring entry, you’re topic to this rule.
What Comes Subsequent
SaaS corporations ought to contemplate this month (April 2025) because the compliance deadline. The FTC is anticipated to offer additional steerage, however the rule is finalized, and companies that delay updates might face penalties.
This isn’t nearly avoiding fines however assembly trendy buyer expectations. Not having a easy manner for customers to cancel their subscription isn’t a retention technique… it’s a horrible person expertise that questions your product and your organization’s legitimacy.
Too usually, companies make individuals bounce via limitless hoops simply to cancel a subscription. The FTC’s rule will finish these methods and traps, saving People money and time. No person must be caught paying for a service they not need.
Lina Khan, FTC Chair
Within the aggressive SaaS panorama, belief is foreign money. Giving customers a transparent manner out isn’t simply legally required—it’d simply be what brings them again later.
