Companies are legally required to tell you about auto-renewal terms before you subscribe. When they fail, you have powerful rights. Here is what every consumer should know.
The Restore Online Shoppers' Confidence Act (ROSCA), enacted by Congress in 2010, is the primary federal law governing automatic renewal and negative option practices for online transactions. ROSCA was created in response to widespread consumer complaints about deceptive online subscription practices, particularly those involving hidden recurring charges and difficult cancellation processes.
ROSCA establishes three core requirements for any business selling subscriptions online. First, the seller must clearly and conspicuously disclose all material terms of the transaction before obtaining the consumer's billing information. This includes the total cost, billing frequency, and the fact that charges will recur automatically. Second, the seller must obtain the consumer's express informed consent before charging them. Pre-checked boxes and buried fine print do not constitute informed consent. Third, the seller must provide a simple mechanism for the consumer to stop recurring charges.
Violations of ROSCA are enforced by the FTC and carry the same penalties as violations of FTC Act Section 5, which prohibits unfair or deceptive acts or practices. The FTC has used ROSCA to pursue enforcement actions against companies across numerous industries, resulting in millions of dollars in penalties and required refunds. ROSCA also gives state attorneys general the authority to bring civil actions for violations, providing an additional layer of enforcement. For information on how ROSCA interacts with the FTC's newer regulations, see our guide on the click-to-cancel rule.
While ROSCA provides the federal baseline, more than 29 states have enacted their own auto-renewal laws that often go further than federal requirements. These state laws vary in their specific provisions but share common themes of enhanced disclosure, consent, and cancellation requirements.
California's ARL is the most influential state auto-renewal law and has served as a model for other states. It requires that auto-renewal terms be presented clearly and conspicuously before the purchase, that the consumer provide affirmative consent, and that an acknowledgment with cancellation instructions be sent after purchase. Critically, if a company violates these requirements, it must provide a full refund of all renewal charges. The law also requires that cancellation be available through the same medium used to subscribe. For a full state-by-state comparison, see our cancellation rights by state guide.
New York's auto-renewal law requires clear disclosure of renewal terms, express consumer consent, and easy cancellation. The New York Attorney General has been particularly active in enforcing these provisions, pursuing multiple high-profile cases against subscription companies that used deceptive auto-renewal practices. New York also requires that renewal notices be sent to consumers before the renewal date for subscriptions over a certain term length.
Illinois requires clear disclosure of auto-renewal terms and a cost-effective cancellation mechanism. Uniquely, Illinois law requires that for contracts with automatic renewal terms of one year or longer, the seller must notify the consumer of the renewal terms between 30 and 60 days before the renewal date. This advance notice requirement gives consumers a meaningful opportunity to cancel before being locked into another long term.
Oregon requires that online subscriptions provide an online cancellation mechanism. Virginia mandates electronic cancellation confirmation. Connecticut requires renewal reminders for annual or longer subscriptions. Vermont's Consumer Protection Act broadly covers deceptive subscription practices. Georgia, Florida, North Carolina, and numerous other states have also enacted or updated auto-renewal provisions in recent years. The trend is clearly toward stronger consumer protections across all states.
Across federal and state laws, a clear set of required disclosures has emerged. Any company selling subscriptions with automatic renewal should be providing all of the following information before you complete your purchase.
The full price after any introductory or trial period, the billing frequency (monthly, annually, etc.), any price escalations or variable pricing, applicable taxes and fees, and the total cost of the subscription over the initial term.
The fact that the subscription will automatically renew, the length of each renewal term, the renewal price (especially if different from the introductory price), and when the next renewal will occur.
How to cancel the subscription, any deadlines or notice periods for cancellation, whether you can receive a partial refund for unused portions, and what happens to your account and data after cancellation.
If offering a free or discounted trial: when the trial ends, what the full price will be, that you will be automatically charged at the end of the trial, and how to cancel before the trial converts to a paid subscription.
Knowing what to look for helps you identify when a company is violating auto-renewal laws, which in turn gives you leverage for refunds and supports broader enforcement efforts. Here are the most common violations.
If the auto-renewal terms are in small print, behind a hyperlink, mixed in with lengthy terms of service, or otherwise not prominently displayed near the purchase button, the company may be violating disclosure requirements. Terms should be clear, conspicuous, and visible without scrolling or clicking additional links.
Many state laws require companies to send an acknowledgment after purchase that includes the renewal terms and cancellation instructions. If you subscribe and do not receive a confirmation email or receipt with this information, the company may be in violation. Save all purchase confirmations in Subcut for your records.
If you cannot find a way to cancel, or if the cancellation process is significantly more difficult than the sign-up process, the company is likely violating both state auto-renewal laws and the FTC's click-to-cancel rule. Document the difficulty and report the violation.
If you are charged a higher price at renewal than what was disclosed when you subscribed, and you were not given advance notice of the price change, the company may be violating auto-renewal disclosure requirements. You have the right to dispute these charges and request a refund of the difference. See our refund laws guide for details.
The European Union has established comprehensive consumer protection frameworks that provide strong auto-renewal protections for EU residents. The Consumer Rights Directive requires pre-contractual information including all costs and renewal terms, provides a 14-day cooling-off period for most online purchases, and prohibits pre-checked consent boxes for additional charges.
The Unfair Commercial Practices Directive prohibits misleading and aggressive commercial practices, which includes deceptive auto-renewal schemes. Individual EU member states may have additional protections beyond the directive minimums. For example, Germany requires clear and conspicuous placement of the order button text indicating a payment obligation.
For US consumers, EU protections are relevant if you subscribe to services based in the EU or if the company applies EU standards globally. Increasingly, multinational subscription companies are adopting the stricter EU standards for all customers to simplify compliance.
The Restore Online Shoppers' Confidence Act (ROSCA) is a federal law enacted in 2010 that requires online sellers to clearly disclose all material terms of automatic renewal offers, obtain the consumer's express informed consent before charging, and provide a simple mechanism for stopping recurring charges. Violations of ROSCA can result in FTC enforcement actions with substantial penalties. ROSCA applies to any business that sells goods or services with automatic renewal terms through the internet.
Under federal and state laws, companies must disclose the full price of the subscription after any introductory period, the length of the subscription term and renewal period, the fact that the subscription will automatically renew, the cancellation policy including how to cancel, and any price increases that will occur at renewal. These disclosures must be clear, conspicuous, and presented before the consumer completes the purchase.
EU consumer protection directives generally provide stronger auto-renewal protections than US federal law. The EU Consumer Rights Directive grants a 14-day cooling-off period for most online purchases, requires clear pre-contractual information, and prohibits pre-checked consent boxes. Individual EU member states may have additional protections. The key difference is that EU law tends to be more prescriptive about specific consumer rights, while US law varies significantly by state.
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