The Federal Trade Commission (FTC) has issued updated guidelines that impact how recurring memberships and subscriptions must be presented and managed. This article explains what the new rules mean and how CenterEdge is helping you stay compliant.

What is the Negative Option Rule?

Negative Option Marketing refers to situations where a customer's inaction is interpreted as agreement to continue receiving, and paying for, a product or service. A common example is a free trial that turns into a paid subscription unless canceled.

While CenterEdge’s membership platform does not include free trials, recurring billing and automatic renewals are considered part of this rule. To remain compliant, the FTC requires that customers receive a clear and conspicuous explanation of:

• What they are signing up for
• That the enrollment is recurring
• The amount and frequency of charges
• The date of the first and subsequent charges
• The terms of automatic renewal
• How to cancel

How CenterEdge Helps

To meet these guidelines, we are updating the Advantage Memberships (legacy memberships can't be purchased online and aren't subject to the new rules) platform to:

• Embed billing terms directly into the Membership Agreement when sold online
• Provide a new Membership Welcome Email that includes billing and cancellation details
• Have Membership Agreements Enabled by Default
• Enhance visibility of recurring charges at checkout (e.g., showing the dollar amount with "Billed Monthly")

These updates provide transparency and ensure your business is protected under the new regulations.

What is the Click to Cancel Rule?

The Click to Cancel rule requires that if a membership can be started online, it must also be able to be canceled online—without barriers such as calling customer service or answering unnecessary questions.

Our Current Cancellation Process

We are already compliant with this rule:

• Customers can log in to their account and see membership details at the top of the page
• A clear Cancel button is present
• The cancellation process leads directly to a confirmation page explaining that the action is final

Minor Improvements to Improve Compliance

• Removing “Reason for cancellation” as a required field to reduce friction. It will default to “Other” and remain optional

Summary of Updates

• Embedded billing terms into Membership Agreements
• New “Membership Welcome” email with billing and cancellation details
• Automatically include cancellation info with “Billed Monthly” text
• Optional cancellation reason field

Your Steps for Compliance

• Enable and use Membership Agreements - You can customize the agreement text to match your business needs

Additional Recommendations (Not Required, but Encouraged)

• Include a Pre-Renewal Reminder Email, especially for annual memberships
• Clearly outline benefits and billing terms in all communications

If you have any questions or would like assistance setting up Membership Agreements or email templates, please contact CenterEdge Support.