NEGATIVE OPTION COMPLIANCE CHECKLIST

Auto-Renewal & Subscription Compliance

DOCUMENT CONTROL

PART I: PROGRAM IDENTIFICATION

Section A: Negative Option Program Type

Does your business use any of the following negative option features?

☐ Automatic Renewal/Continuous Service:
- Subscription automatically renews unless customer cancels
- Membership continues until customer takes action

☐ Free Trial Conversion:
- Free trial converts to paid subscription automatically
- Free sample converts to ongoing purchases

☐ Continuity Plan:
- Ongoing shipments of products at regular intervals
- Replenishment programs

☐ Prenotification Plan:
- Periodic announcements offering merchandise
- Customer must reject or return to avoid charges

Section B: Program Details

Program Name: [________________________________]

Product/Service Description:
[________________________________]
[________________________________]

Pricing Structure:
| Plan Type | Price | Billing Frequency |
|-----------|-------|-------------------|
| [________________________________] | $[________] | ☐ Monthly ☐ Quarterly ☐ Annual ☐ Other |
| [________________________________] | $[________] | ☐ Monthly ☐ Quarterly ☐ Annual ☐ Other |
| [________________________________] | $[________] | ☐ Monthly ☐ Quarterly ☐ Annual ☐ Other |

Free Trial Offered: ☐ Yes ☐ No
If yes, duration: [____] days

Promotional/Introductory Pricing: ☐ Yes ☐ No
If yes, describe: [________________________________]

PART II: DISCLOSURE REQUIREMENTS

Section A: Required Disclosures Checklist

The following material terms MUST be disclosed BEFORE obtaining billing information:

1. Charge Disclosure

☐ That the consumer WILL be charged for the good or service
☐ That charges WILL increase after any trial period ends
☐ Current disclosure language: [________________________________]

Compliant? ☐ Yes ☐ No ☐ Needs Revision

2. Deadline Disclosure

☐ Each deadline by which consumer must act to prevent charges
☐ Each deadline by which consumer must act to stop charges
☐ Current disclosure language: [________________________________]

Compliant? ☐ Yes ☐ No ☐ Needs Revision

3. Amount/Frequency Disclosure

☐ Amount or range of costs consumer will be charged
☐ Frequency of the charges (monthly, annually, etc.)
☐ Current disclosure language: [________________________________]

Compliant? ☐ Yes ☐ No ☐ Needs Revision

Section B: Disclosure Placement and Format

Disclosure must be made BEFORE obtaining billing information:

☐ Disclosures appear BEFORE payment information is collected
☐ Disclosures are NOT buried in terms and conditions
☐ Disclosures are NOT hidden behind hyperlinks or pop-ups
☐ Disclosures are proximate to the consent request

Format Requirements:

☐ Disclosures are clear and conspicuous
☐ Font size is readable (not smaller than surrounding text)
☐ Color contrast is sufficient for easy reading
☐ Disclosures are in same language as the transaction
☐ Disclosures stand out from surrounding content
☐ Key terms are not obscured by other text or graphics

Section C: Disclosure Language Review

Current Pre-Billing Disclosure (copy exact text):

[________________________________]
[________________________________]
[________________________________]
[________________________________]

Compliance Assessment:

PART III: CONSENT REQUIREMENTS

Section A: Affirmative Consent Mechanism

How does the consumer provide consent to the negative option feature?

☐ Unchecked checkbox that consumer must check
☐ Signature (electronic or physical)
☐ Button or click action specifically for negative option consent
☐ Other: [________________________________]

Consent Mechanism Compliance:

☐ Consent is obtained through affirmative action
☐ Consent checkbox/button is NOT pre-checked
☐ Consent is separate from other transaction terms
☐ Consent request contains NO unrelated information
☐ Consent request is clear and unambiguous
☐ Consent request is non-deceptive

Section B: Consent Separation Requirement

Is negative option consent separate from:

☐ General terms and conditions acceptance
☐ Privacy policy acceptance
☐ Marketing/promotional opt-ins
☐ Other product/service purchases

Current consent mechanism screenshot/description:
[________________________________]
[________________________________]

Section C: Consent Language Review

Current Consent Request (exact text near checkbox/button):

[________________________________]
[________________________________]

Does consent language:
☐ Clearly state the negative option feature
☐ Reference the disclosed material terms
☐ NOT include extraneous information
☐ Use plain, understandable language

PART IV: CANCELLATION REQUIREMENTS ("CLICK-TO-CANCEL")

Section A: Simple Cancellation Mechanism

The Rule requires a "simple mechanism" to cancel that is at least as easy as the sign-up method.

Sign-up method used:
☐ Online/website
☐ Mobile app
☐ Phone
☐ In-person
☐ Mail
☐ Other: [________________________________]

Cancellation methods currently offered:

Section B: Online Cancellation Requirements

If sign-up is available online, online cancellation MUST be available:

☐ Cancellation can be completed online
☐ Cancellation link/button is easy to find
☐ Cancellation does NOT require calling customer service
☐ Cancellation does NOT require chatting with an agent first
☐ Cancellation does NOT require sending physical mail
☐ Number of steps to cancel is comparable to sign-up steps

Path to online cancellation:
1. [________________________________]
2. [________________________________]
3. [________________________________]
4. [________________________________]

Number of clicks/steps to sign up: [____]
Number of clicks/steps to cancel: [____]

Section C: Prohibited Cancellation Practices

The following practices are violations of the Rule:

☐ Requiring consumers to listen to "save" pitches before allowing cancellation
☐ Requiring consumers to speak with a representative when sign-up was self-service
☐ Creating unreasonable barriers to cancellation
☐ Requiring consumers to take more steps to cancel than to sign up
☐ Burying or hiding cancellation options
☐ Requiring consumers to provide unnecessary information to cancel
☐ Extending wait times to discourage cancellation

Current Practice Assessment:

Section D: Cancellation Confirmation

☐ Cancellation confirmation is provided to consumer
☐ Confirmation includes effective date of cancellation
☐ Confirmation is provided in durable medium (email, written)

PART V: TELEPHONE/IN-PERSON ENROLLMENT REQUIREMENTS

Section A: Phone Enrollment Disclosures

If consumers enroll by phone, disclosures must be made orally:

☐ All material terms are disclosed verbally before payment info collected
☐ Scripts include complete disclosure language
☐ Calls are recorded for compliance verification
☐ Disclosures are not rushed or mumbled

Phone Script Disclosure Language:
[________________________________]
[________________________________]
[________________________________]

Section B: In-Person Enrollment

If consumers enroll in person:

☐ Written disclosures are provided
☐ Verbal disclosures supplement written materials
☐ Consumer signs acknowledgment of terms
☐ Copy of terms provided to consumer

PART VI: SAVE/RETENTION OFFERS

Section A: Permissible Save Attempts

Save offers are permitted IF:

☐ Consumer can decline and proceed with cancellation easily
☐ Save offer is presented once, not repeatedly
☐ "No thank you" or decline option is clear
☐ Declining does not require additional steps
☐ Save offer does not materially delay cancellation

Section B: Save Offer Compliance Review

Current Save Offer Process:

☐ Single save offer presented: ☐ Yes ☐ Multiple attempts made
☐ Easy decline mechanism: ☐ Yes ☐ No
☐ Cancellation completes immediately after decline: ☐ Yes ☐ No

Save Offer Script/Content:
[________________________________]
[________________________________]

PART VII: RECORDKEEPING

Section A: Required Records

Maintain records for compliance verification:

☐ Copies of all disclosure materials and consent mechanisms
☐ Consumer consent records (checkbox selections, signatures)
☐ Cancellation requests and confirmations
☐ Customer service logs related to cancellation
☐ Training materials for customer service staff
☐ Changes to disclosure language and consent mechanisms

Section B: Retention Period

Records should be maintained for: [____] years

Recommended minimum: 3-5 years from last transaction

PART VIII: STATE LAW COMPLIANCE

Section A: Automatic Renewal Laws by State

Many states have additional automatic renewal requirements

Section B: State-Specific Requirements Checklist

California Auto-Renewal Law:
☐ Affirmative consent obtained
☐ Clear and conspicuous disclosure of terms
☐ Acknowledgment provided in manner that can be retained
☐ Easy-to-use cancellation mechanism provided
☐ Gift term contracts: reminder before renewal

PART IX: COMPLIANCE VERIFICATION

Section A: Testing Protocol

Conduct regular testing of:

☐ Sign-up flow to verify disclosures appear correctly
☐ Consent mechanism functionality
☐ Cancellation flow to ensure ease of use
☐ Confirmation email delivery
☐ Customer service scripts and handling

Testing Schedule:
| Test Type | Frequency | Last Completed | Next Due |
|-----------|-----------|----------------|----------|
| Sign-up flow | Monthly | [__/__/____] | [__/__/____] |
| Cancellation flow | Monthly | [__/__/____] | [__/__/____] |
| Script review | Quarterly | [__/__/____] | [__/__/____] |
| Full audit | Annual | [__/__/____] | [__/__/____] |

Section B: Compliance Scorecard

PART X: ACTION ITEMS

Section A: Required Changes

Section B: Implementation Timeline

PART XI: CERTIFICATION

Section A: Assessment Certification

I, [________________________________], have completed this Negative Option Compliance Checklist and certify that:

1. The assessment reflects the current state of the Company's negative option practices.
2. Areas of non-compliance have been identified and documented.
3. Action items have been assigned with appropriate deadlines.

Signature: _________________________________
Title: [________________________________]
Date: [__/__/____]

Section B: Legal/Compliance Approval

Overall Compliance Status:
☐ Fully compliant with FTC Negative Option Rule
☐ Substantially compliant - minor issues identified
☐ Non-compliant - significant remediation required

Legal Reviewer: [________________________________]
Date: [__/__/____]
Comments:
[________________________________]
[________________________________]

SOURCES AND REFERENCES

• 16 CFR Part 425 - Negative Option Rule
• FTC Negative Option Rule Overview
• FTC Click-to-Cancel Rule Guidance
• FTC Negative Option Rule Final Rule (November 2024)
• FTC Business Guidance on Subscriptions

This checklist is designed for businesses operating subscription, auto-renewal, or other negative option programs. Given the FTC's active enforcement in this area and significant penalties, all programs should be reviewed by qualified legal counsel.