On October 11, 2024, the Federal Trade Commission (FTC) finalized its “Click to Cancel” rule to make it easier for consumers to cancel subscriptions, including gym memberships. The new law takes effect in six months unless challenged. Understanding how this rule affects your gym’s cancellation process is critical to staying compliant and maintaining trust with your members.
What Is the “Click to Cancel” Rule?
The FTC’s Click to Cancel rule requires businesses to provide a simple way for customers to cancel recurring payments. If your gym offers memberships with automatic billing, you must offer a “one-click” option for online cancellations that mirrors the ease of signing up.
How Does the FTC Rule Impact Gym Owners?
The rule targets subscription services, including gyms, by preventing businesses from using deceptive practices that make cancellations difficult. Here’s how you can comply:
- Simplify the Cancellation Process: Make sure your gym’s website allows members to cancel as easily as they signed up, especially for those who signed up online.
- Clear Membership Terms: Clearly explain how members can cancel their memberships, from the beginning, to avoid disputes.
State-Specific Negative Option Laws for Gym Owners
In addition to the FTC rule, many states have their own laws on negative option contracts and automatic renewals. Gym owners operating in these states must comply with both state and federal regulations. Here’s a breakdown:
1. California
- Law: Automatic Renewal Law (ARL) – Requires clear terms for renewals and a simple cancellation process.
- Impact: Ensure your gym’s agreements have clear renewal terms and offer easy online cancellations.
2. New York
- Law: Automatic Renewal Law – Requires written consent before automatic renewals.
- Impact: Obtain written consent from members for recurring charges and offer easy cancellations.
3. Vermont
- Law: Requires affirmative consent before charging for renewals.
- Impact: Make sure members agree to recurring charges and provide clear cancellation options.
4. Illinois
- Law: Automatic renewals must be clearly disclosed, and cancellations must be as simple as sign-ups.
- Impact: Ensure transparency and offer straightforward cancellations.
5. Hawaii
- Law: Requires clear terms and an easy cancellation method.
- Impact: Provide simple cancellation options for your members.
6. Washington, D.C.
- Law: Requires renewal reminders and an easy cancellation process.
- Impact: Send reminders before renewals and ensure cancellations are hassle-free.
7. Florida
- Law: Requires renewal notices and clear cancellation methods.
- Impact: Notify members before renewals and offer simple cancellation options.
8. Colorado
- Law: Clear disclosure of renewal terms and easy cancellation processes.
- Impact: Make cancellations as easy as sign-ups.
9. North Dakota
- Law: Clear renewal terms and straightforward cancellation methods.
- Impact: Ensure transparency and provide easy cancellation options.
Why It Matters for Your Gym
Staying compliant with both the FTC’s Click to Cancel rule and state-specific laws isn’t just about avoiding penalties—it’s about building trust. Offering a transparent cancellation process can help boost member retention and loyalty.
Next Steps for Gym Owners
- Review Your Cancellation Policy: Ensure it complies with federal and state laws.
- Update Your Website: Make the cancellation process as easy as signing up.
- Communicate with Members: Be clear about the new process to build trust.
At Gym Lawyers PLLC, we specialize in helping gym owners navigate legal changes like the FTC’s Click to Cancel rule and state-specific laws. Contact us for a compliance review and ensure your gym stays protected.
Protect Your Gym Today
Contact us to ensure full compliance with the FTC’s new Click to Cancel rule and state regulations.
