Our Consumer Protection/FTC Team examines how the FTC continues to actively pursue companies with allegedly complicated cancellation practices by relying on existing legal authority despite setbacks to the Click-to-Cancel Rule.
- The FTC alleges that gyms used complex and misleading methods to hinder membership cancellations
- Consumers allegedly faced obstacles to cancellation in violation of Section 5 of the FTC Act and Restore Online Shoppers’ Confidence Act
- Even after the Click-to-Cancel Rule was struck down, the FTC can impose substantial penalties and remains committed to enforcing simple cancellation mechanisms for online services
On August 20, 2025, the Federal Trade Commission (FTC) announced it had brought a complaint against Fitness International LLC and Fitness & Sports Clubs LLC, which operate LA Fitness and other national gym chains. The complaint, brought in the Northern District of California, alleges that the companies used unclear and complicated cancellation methods that made it difficult for consumers to cancel their memberships.
The announcement of this complaint, which was unanimously approved by the three FTC commissioners, shows that the FTC is undeterred after its Click-to-Cancel Rule was struck down by the Eighth Circuit, previously covered by us here. The FTC will not shy away from using its existing legal authority to take action against companies it believes have difficult subscription cancellation practices.
FTC’s Allegations
The FTC alleges that the companies’ cancellation practices constitute unfair and deceptive acts and practices in violation of Section 5 of the FTC Act and that they violate the Restore Online Shoppers’ Confidence Act (ROSCA) by making inadequate disclosures and failing to provide consumers with a simple cancellation mechanism. Under these laws, the FTC is able to seek injunctive relief, consumer redress, and civil penalties of up to $53,088 per violation.
The FTC’s complaint alleges that:
- Consumers were required to cancel their memberships either in person or by mail even though they could sign up for a membership online.
- Consumers who attempted to cancel their memberships in person were only permitted to do so with one specific employee at a given location, despite multiple employees having authority to sign consumers up for memberships.
- Consumers who attempted to cancel by mail were misinformed that they needed to use a specific cancellation form available through their website login, when written notice of their cancellation request was permitted.
- Consumers were not clearly informed that add-on amenities and services could be cancelled without affecting their gym membership or by using the complicated processes required for cancelling their gym membership.
- The companies trained staff to deny cancellation requests that were made by phone or email.
Existing Statutory Authority After Click-to-Cancel
Similar to the Uber complaint we previously covered here, this action serves as a reminder that in the aftermath of the Click-to-Cancel Rule being struck down, at least for online sales, the FTC maintains authority to pursue what it views as defective cancellation policies. The FTC is relying on its statutory authority under Section 5 of the FTC Act and ROSCA, which requires that online sellers provide a simple mechanism to consumers to stop recurring charges. This action follows closely on the heels of a settlement with an online dating site earlier this month that similarly alleged difficulty in cancelling subscriptions.
Of note, this action serves as an example that the FTC is willing to take an expansive view of ROSCA and will use that authority to pursue sellers of in-person services (such as gym facilities) when those services can be purchased through a website. As this action demonstrates, when an online seller places material impediments in the way of consumers attempting to cancel their recurring subscriptions, that conduct may well be viewed by the Trump-Vance FTC as a violation of ROSCA.
The Click-to-Cancel Rule itself continues to face an uncertain future. As we noted in our previous advisory, the FTC can choose to appeal the Eighth Circuit’s ruling striking down the rule, return to the rulemaking process to correct the deficiencies identified in the Eighth Circuit’s decision, or walk away from the rule and continue to rely on existing legal authority under Section 5 and ROSCA, as it did in this case.
Key Takeaways
Companies, and online sellers in particular, cannot view the halting of the Click-to-Cancel Rule as indicating their cancellation practices are now free from FTC scrutiny and the potential for significant monetary penalties. On the contrary, the FTC continues to demonstrate a willingness to use authority under the FTC Act and ROSCA to pursue actions against companies that it views as not providing simple cancellation methods. Companies that have concerns whether their cancellation mechanisms are proper should seek legal advice from qualified and experienced counsel.
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