Overturning of ‘Click-to-Cancel’ Rule Marks Victory for Fitness Industry, But It Isn't Going Away

In a major win for the fitness industry, the US Court of Appeals for the Eighth Circuit recently vacated the Federal Trade Commission’s (FTC) controversial “click-to-cancel” rule.

While consumers, business owners, lawmakers, and the Health & Fitness Association (HFA) all support simple, transparent cancellation methods, the way the FTC’s click-to-cancel rule was written would have harmed consumers and businesses alike.

Let’s break down why the rule was challenged, what this decision actually means, what threats are still coming at the state level, and how your business can stay protected.

What was the click-to-cancel rule?

Finalized by the FTC in October 2024, the click-to-cancel rule was designed to simplify how consumers cancel subscription services. It would have required businesses to allow customers to cancel through the same method they used to enroll—for example, a click-to-cancel button if they joined online.

It was part of the FTC’s ongoing review of its 1973 Negative Option Rule and would have applied to almost all negative option programs in any media, including memberships to fitness businesses.

What does it mean that this rule was vacated?

In short, it means the FTC’s click-to-cancel rule is no longer legally valid.

The Eighth Circuit’s decision wipes the rule off the books completely, not just temporarily or in part. Because of this, fitness businesses are not required to comply with the federal rule, which was originally set to be enforced starting July 14, 2025.

Why did HFA oppose the execution of the FTC’s click-to-cancel rule?

HFA fully supports clear, fair, and consumer-friendly cancellation policies. We believe operators should provide simple and transparent ways for members to manage their memberships, and offering a click-to-cancel option is one way to do that.

Read HFA's statement on the court's ruling here.

However, despite its virtuous mission, the execution of the FTC’s click-to-cancel rule was flawed in such a way that its implementation would have been counterproductive to the original goal of providing a more seamless experience for consumers.

Here’s what was wrong with the rule as it was written:

1. Immediate Termination of Payments

   The rule’s requirement for immediate termination of all billing upon cancellation was borderline impossible for many operators to implement, especially those using third-party billing systems that batch or process payments on a fixed schedule. It also ignored the nuances of existing contractual obligations, which set businesses up for potential chargebacks, refund disputes, or financial shortfalls.

2. Vague Language and Legal Ambiguity

   The rule lacked clarity on basic operational questions, such as what qualifies as a “matching” cancellation method? What timelines are compliant? How should hybrid enrollment (e.g., joining online, finalizing in-club) be treated? This vagueness created legal uncertainty and put operators at risk for costly disputes and irregular enforcement.

3. Disruption to Core Systems

   Compliance would have required operators to rebuild their billing, CRM, and membership platforms to support immediate cancellation across all channels. For many fitness businesses (especially small and mid-sized operators), this would mean starting from scratch with expensive software overhauls.

4. Eliminating Operational Flexibility

   Fitness businesses operate under a range of models—monthly, annual, family plans, corporate accounts, etc. The rule imposed a rigid standard that didn’t account for operational diversity or customization.

5. No Federal Preemption

   The FTC didn’t clarify how its rule would coexist with the dozens of conflicting state laws already on the books. Without preemption (the invalidation of a US state law that conflicts with federal law), operators could have faced a compliance nightmare, juggling inconsistent laws with no clear resolution.

The rule aimed to protect consumers but did so by imposing inflexible mandates that lacked an understanding of how fitness businesses actually operate. The result would have been confusion, compliance chaos, and disruption to the very member experience it intended to improve.

Why did the court vacate the click-to-cancel rule?

The court agreed with the position of HFA and its partners: The FTC exceeded its legal authority, failed to follow required procedures, and imposed a sweeping mandate that ignored the operational realities of fitness businesses.

But their decision to vacate wasn’t just happenstance. It was the result of a multi-year, multi-front advocacy campaign led by the HFA.

As this rule was developing, the association identified its risk, built a strategic response, and led a coordinated effort to protect the industry. Here’s what that looked like:

1. Formal Comments

   HFA submitted detailed comments during the rulemaking process outlining how the rule would disrupt operations and create legal and technical chaos.

2. Amicus Brief

   HFA filed a legal brief in the court case challenging the rule. It illuminated the rule’s far-reaching implications for the fitness industry, from billing logistics to member engagement strategies, and gave voice to the operational realities that weren’t considered by the FTC.

3. Legislative Strategy

   We activated our Congressional network and worked closely with allies and the US Chamber of Commerce to prepare legislative countermeasures through the Congressional Review Act.

4. Coalition Building

   Behind the scenes, we worked with franchise systems, policy experts, attorneys, and trade allies (including the International Franchise Association) to form a united front challenging the rule’s legality.

This coordinated effort helped build legal momentum and ultimately ensured the court recognized that this rule, as it was written, was incompatible with the structure of businesses in the fitness industry.

Isn’t the click-to-cancel rule a good thing since it’s a consumer protection?

The mission of the FTC’s click-to-cancel rule wasn’t the problem. It was the execution.

The rule tried to solve a real issue but attempted to do so with rigid, overly simplistic mandates that ignored how fitness businesses actually work.

It treated all industries the same, whether they offered a streaming service or were a full-service health club with onboarding, coaching, and long-term goal support. This kind of overgeneralized regulation ultimately hurts both consumers and operators.

Strong consumer protections are necessary, but they must be paired with practical, well-structured policies.

When laws aim to protect consumers without accounting for how an industry actually operates, the laws often miss the mark and are detrimental to both consumers and businesses. That’s why the HFA is continuing to work with lawmakers at the state level to shape laws that strike the right balance.

What’s next for federal and state cancellation and auto-renewal regulations?

The court’s decision on the click-to-cancel rule establishes important precedent for future regulatory challenges. It confirms that agencies, when writing future rules, must consider real-world business impacts, follow proper procedures, and stay within the limits of their legal authority.

With the federal rule vacated, the fight now shifts to the state level where legislatures are looking to mirror or exceed what the FTC proposed in its click-to-cancel rule.

In turn, the HFA is working with lawmakers across the country to help develop state legislation that respects operational realities while protecting consumers with fair, transparent policies, and avoiding duplicative or conflicting mandates.

We’re already producing results in states such as California, New York, Massachusetts, Arizona, Tennessee, Georgia, New Jersey, Pennsylvania, Colorado, Maine, and Connecticut, where we've secured amendments, reshaped bills, and stopped the worst proposals from becoming law.

HFA’s role in the vacation of this rule is a clear signal to legislators—state and federal alike—that the fitness industry is paying attention, organizing early, and ready to engage.

Where can I get guidance about compliance with click-to-cancel and auto-renewal state regulations?

In the coming days, there will likely be heightened scrutiny around cancellation practices and subscription agreements at the state level. Fitness owners and operators need to be prepared to comply with changing laws and protect their businesses from lawsuits, regulatory action, and reputational risk.

To help, HFA hosted a members-only legal briefing on July 23. Members can access the recording.

Led by attorneys from Gibson Dunn—the firm that helped vacate the FTC rule—this session broke down what operators need to know about:

• What the FTC ruling means for your operations
• Where states are heading next
• Compliance strategies to avoid risk
• How to future-proof your billing and cancellation systems

Plus, HFA members have access to state-specific compliance guides to help them understand and meet changing legal requirements. They provide step-by-step guidance on what’s required and how to adapt operations to avoid risk. Reach out to HFA vice president of government affairs, Mike Goscinski, at mgoscinski@healthandfitness.org to get the compliance guides for the states in which you operate.

Want to stay ahead of what’s next? HFA members get exclusive access to legal resources, compliance updates, and advocacy alerts year-round. Join HFA and be part of the only association fighting every day for the industry’s best interests.