Cancelling a membership: notice periods, unearned fees, and the auto-renewal rules on your checkout

What law governs cancelling a practice membership?

Four layers, and the top one does the least work. A federal statute sets three conditions on any recurring charge sold online. Your state's automatic-renewal law adds disclosure and cancellation duties on top of that. If the state has a direct-practice statute, it adds rules about money taken in advance. Underneath all of it sits the membership agreement, which decides everything the statutes leave alone.

The federal statute is the Restore Online Shoppers' Confidence Act, and it reaches any seller putting a recurring charge on a card after an online sign-up. It asks for three things: the material terms disclosed clearly and conspicuously before the billing information is taken, the patient's express informed consent, and a simple mechanism to stop the recurring charge 1Ref 1United States Congress (2010).§8403. Negative option marketing on the Internet.The three federal statutory conditions on any online negative-option or recurring charge (clear and conspicuous disclosure of material terms before billing information is taken, express informed consent, and a simple mechanism to stop the charge), and the point that the statute survived the vacatur of the FTC's rule.. A practice selling memberships through its own checkout page sits inside that statute exactly as a streaming service does.

The state layer carries the specifics, and it varies enough that one state's rule is no guide at all to the next. California decides how a patient who enrolled online is allowed to leave. New York gates its notice duty on the length of the term. Washington and Arizona regulate the prepaid fee itself inside a direct practice and leave the checkout alone. Read your own state's automatic-renewal chapter, and if you bill a flat periodic fee for care, its direct-practice chapter with it.

Counsel earns its hour on two triggers here: selling the membership across state lines, and taking payment more than a month ahead of the care.

Is click-to-cancel still the federal rule?

No. The Federal Trade Commission's 2024 amendments to the negative option rule, which would have required cancellation to be as easy as sign-up across most subscription selling, were vacated by the Eighth Circuit, and the Commission restored the pre-2024 text effective February 12, 2026 2Ref 2Federal Trade Commission (2026).Revision of the Negative Option Rule, Withdrawal of the CARS Rule, Removal of the Non-Compete Rule To Conform These Rules to Federal Court Decisions.The current posture of the federal rule: the Eighth Circuit vacated the 2024 click-to-cancel amendments over the missing preliminary regulatory analysis, and the FTC restored the pre-2024 rule text effective February 12, 2026.. The court's objection went to how the rule was made: the Commission had not issued a preliminary regulatory analysis, and that was held procedurally insufficient.

What came back is narrow. The restored rule governs the classic prenotification negative option plan, where a seller announces a coming shipment and sends it unless the buyer declines, and its cancellation duty is to terminate a contract-complete subscriber's membership promptly once that subscriber asks in writing 3Ref 3Federal Trade Commission (Code of Federal Regulations) (2026).16 CFR Part 425 — Use of Prenotification Negative Option Plans.What the restored federal rule actually reaches: classic prenotification continuity plans, with a duty to terminate a contract-complete subscriber's membership promptly on written request, rather than a general cancellation-parity duty on a card-on-file membership.. A monthly membership billed to a card on file is not that structure, so most of the restored text never reaches it.

But the statute never went anywhere.

The vacatur struck the Commission's rule, not the Act behind it, so the three conditions above still bind every membership sold through a checkout page 1Ref 1United States Congress (2010).§8403. Negative option marketing on the Internet.The three federal statutory conditions on any online negative-option or recurring charge (clear and conspicuous disclosure of material terms before billing information is taken, express informed consent, and a simple mechanism to stop the charge), and the point that the statute survived the vacatur of the FTC's rule.. The federal floor asks for disclosure, consent and an easy exit. Everything more specific is a state question.

What the checkout has to carry before the first charge

Three conditions apply wherever the membership is sold online, and California adds a fourth. Before billing information is taken, the material terms of the recurring charge appear clearly and conspicuously. The patient affirmatively consents to them. A simple way to stop the charge exists. California then requires an acknowledgment the patient can keep, stating the terms, the cancellation policy and the mechanism for cancelling 4Ref 4California State Legislature (2026).Business and Professions Code § 17602.California's disclosure, affirmative-consent and retainable-acknowledgment requirements for a continuous-service membership, and the rule that a patient who enrolled online must be able to terminate exclusively online, at will, without further steps that obstruct or delay..

California also decides the exit by the entrance. A patient who enrolled online has to be able to terminate exclusively online, at will, without engaging any further steps that obstruct or delay 4Ref 4California State Legislature (2026).Business and Professions Code § 17602.California's disclosure, affirmative-consent and retainable-acknowledgment requirements for a continuous-service membership, and the rule that a patient who enrolled online must be able to terminate exclusively online, at will, without further steps that obstruct or delay.. A cancel link that opens a call-us page, or a retention flow the patient has to argue past, is the arrangement that language was written against.

Getting the enrollment wrong carries an unusual penalty in California. Whatever was sent under an automatic-renewal or continuous-service agreement that failed those conditions is deemed for all purposes an unconditional gift to the consumer 5Ref 5California State Legislature (2009).Business and Professions Code § 17603.The California remedy for a non-compliant automatic-renewal or continuous-service charge: what was sent is deemed for all purposes an unconditional gift to the consumer.. The section's words are goods, wares, merchandise and products; none of the sources here settles how far that reaches into a membership built on care.

Notice periods: whose deadline, and how long?

Two different notice duties get confused with each other. One runs from the practice to the patient before a renewal, and in the states that impose it, it applies only above a term-length threshold. The other runs from the patient to the practice before a cancellation takes effect, and that one is a contract term the practice writes for itself. New York is the clearest published example of the first.

New York's duty attaches to an automatic-renewal contract with an initial paid term of a year or more that renews for a term of six months or more. Where it attaches, written notice has to reach the patient at least 15 days and no more than 45 days before the cancellation deadline 6Ref 6New York State Legislature (2024).§ 527-a. Unlawful practices.New York's term-length threshold for the renewal-notice duty (an initial paid term of a year or more renewing for six months or more), the 15-to-45-day notice window before the cancellation deadline, and the requirement that cancellation be as easy as, and through the same medium as, enrollment.. A month-to-month membership falls under that threshold. An annual plan that rolls into a second year falls above it, which is one more thing riding on the monthly-or-annual choice made while pricing the tiers.

The same section ties the exit to the entrance as well: the cancellation mechanism has to be as easy to use as the one the patient used to consent, and through the same medium 6Ref 6New York State Legislature (2024).§ 527-a. Unlawful practices.New York's term-length threshold for the renewal-notice duty (an initial paid term of a year or more renewing for six months or more), the 15-to-45-day notice window before the cancellation deadline, and the requirement that cancellation be as easy as, and through the same medium as, enrollment.. Enrolled by web form, cancelled by web form.

The notice a patient owes the practice is a different animal, and no statute in this set fixes its length. A written-notice clause is a common convention, and the practice picks the period. Washington steps in beside that clause, and what it regulates is the money: in a direct practice, an existing patient's fee can rise no more than once in twelve months, and any change takes 60 days' advance notice 7Ref 7Washington State Legislature (2007).RCW 48.150.030 — Direct fee—Monthly basis—Designated contact person.Washington's money mechanics for a direct practice: prepayment beyond one month held in trust and drawn down as earned, prompt refund of the unearned balance prorated to the date termination notice is received, and a fee increase limited to once every twelve months on 60 days' advance notice..

Refunding the part you have not earned

Prorate to the date the notice arrived, and in two states a statute compels the refund. Washington requires any prepayment beyond one month's fee to sit in trust and be drawn down only as it is earned, with whatever remains unearned promptly refunded once the practice receives the patient's termination notice 7Ref 7Washington State Legislature (2007).RCW 48.150.030 — Direct fee—Monthly basis—Designated contact person.Washington's money mechanics for a direct practice: prepayment beyond one month held in trust and drawn down as earned, prompt refund of the unearned balance prorated to the date termination notice is received, and a fee increase limited to once every twelve months on 60 days' advance notice.. Arizona caps advance payment of the periodic fee at twelve months and requires the unearned months returned on termination 8Ref 8Arizona State Legislature (2025).44-1799.94. Direct primary care agreements; fees.Arizona's twelve-month cap on advance prepayment of the periodic fee and its requirement that unearned months be refunded on termination..

But both of those are direct-practice statutes, and they reach direct practices in those two states.

Nothing in the federal statute, the restored FTC rule, or the California and New York auto-renewal laws requires money already collected to come back. Those provisions govern the next charge. A membership practice outside a direct-practice framework prorates because its own agreement says so, or because a fight over one unearned month costs more than the month is worth. No statute in this set compels it.

These four are the states verified here, and four states are not a map. Other states run their own automatic-renewal statutes, a direct-practice chapter is not universal, and none of these rules comes from a medical board.

The terms you write, and the money after the refund

The agreement decides everything the statutes leave open, which is most of it. Name the notice period, the proration method, what happens to a prepaid year, whether unused visits carry value, when the card on file is deleted, and how long a refund takes to reach the patient. None of those carries a regulated figure in the sources here, and that includes any early-termination or account-closure charge.

A fee for a late-cancelled visit is a different instrument and belongs in its own clause. A practice prices late cancellations against the cost of the empty slot, and folding that clause into the membership's cancellation terms produces an agreement nobody can read when it matters.

Refunds do not shrink the Form 1099-K a payment processor files. The gross amount reported in Box 1a is the gross amount of the payment transactions, with no reduction for fees, refunds, discounts or chargebacks 9Ref 9Internal Revenue Service (2026).Instructions for Form 1099-K (Rev. December 2026) — Payment Card and Third Party Network Transactions.The Box 1a definition of gross amount: the gross amount of the payment transactions, with no reduction for fees, refunds, discounts or chargebacks.. The figure the practice reports on its own return has to be reconciled down from that gross using its own record of what went back out, which is worth raising with the CPA before the form arrives.

Keep the record as the cancellations happen: the date the notice arrived, the reason the patient gave, the amount refunded, and the date it cleared. Those four fields feed the churn arithmetic, and they are cheaper to write down once than to rebuild later from a processor's export.