SB25-145 Brief Summary

Many subscription services make it easy to sign up but surprisingly difficult to cancel. After a federal effort to address this issue stalled, Colorado enacted its own “Click to Cancel” requirements through the Online Cancellation Act. These rules already affect online consumer subscriptions and will expand on February 16, 2026 to cover business-to-business subscriptions as well, significantly broadening compliance obligations for sellers operating in Colorado.

Background

Anyone who has signed up online for a recurring delivery service, membership, or any other subscription is likely familiar with how difficult it can be to cancel after signing up, even when cancellation is supposedly allowed. Instead of a simple click, cancellation often means navigating hidden settings, multiple confirmation screens, or being directed to call or email a representative before the subscription will end.

Under common law, customers who signed up online for an “automatic renewal contract,” i.e. a subscription agreement, were required to follow contract terms on how to cancel the subscription. To discourage cancellations, subscription sellers often make cancellation difficult or impossible by setting out strict, burdensome processes and requiring customers reach out using specific contact information that was often intentionally made difficult to find.

At a national level, the Federal Trade Commission (FTC) adopted a nationwide “Click to Cancel” Rule[1] in October of 2024 which was designed to make it easier to cancel ongoing subscription agreements. In July of 2025, the United States Court of Appeals for the Eighth Circuit[2] vacated the Click to Cancel Rule before it went into effect, finding that the FTC failed to follow the correct procedural steps in adopting the rule.[3] While the FTC is likely to revisit the rule, the Colorado Legislature has already stepped in with similar laws affecting subscription agreements in Colorado.

The Colorado Legislature originally passed House Bill 1239 in 2021, requiring subscription-based sellers to provide household consumers a simple, cost-effective, timely, and easy-to-use mechanism for canceling subscriptions. That law did not specifically require sellers to provide an online link to cancel and gave sellers the option to continue using an in-person cancellation process. This meant that online sellers had the option to demand customers appear in-person to cancel a subscription, even if the customer originally signed up for the subscription online. In 2025, Colorado’s Online Cancellation Act changed that.

Colorado’s Online Cancellation Act

In June of 2025, Governor Polis signed SB25-145, an Act “Concerning The Right of a Consumer to Cancel Automatic Renewal Contracts Online” (“Online Cancellation Act”) Most of the Online Cancellation Act became effective on August 6, 2025.

Effective August 6, 2025, any person offering or renewing a subscription contract to Colorado individual consumers online must provide a one-step online cancellation link. That link may appear either on the seller’s website or in an email to the customer.

However, if a Colorado customer signs up for a subscription through offline means, the seller does not have to provide a one-step online cancellation link and may still require consumers cancel by appearing in person at a location where the consumer regularly consumes the services.

Applicability to Business-to-Business Transactions

Like most consumer protection laws, Colorado’s 2021 reforms and the 2025 Online Cancellation Act initially applied only to personal transactions, meaning individual consumer transactions made for personal, family, or household purposes and did not apply to most transactions between businesses or entities. However, SB25-145 contains a delayed effective date with additional phased-in protections for a wider range of consumers and transactions.

Effective February 16, 2026, Colorado’s Online Cancellation Act expands the definition[4] of “consumer,” which now includes businesses and entities. The Act also deletes the “personal, family, or household purposes” requirement. Those delayed provisions make the law applicable to essentially every subscription agreement with a Colorado customer, including business-to-business subscriptions made for commercial purposes.

These delayed changes are made to the definition in the original 2021 law, meaning any person offering or renewing a subscription contract to a Colorado business or entity will not only have to comply with the new one-step online cancellation link requirements from the 2025 reforms but will be subject to the entire set of subscription contract reforms, including those originally adopted in 2021.

In addition to the one-step online cancellation link for any subscriptions made online, key requirements of the 2021 reforms, which now apply to business and commercial transactions made or renewed after February 16, 2026, include:

• Presenting the automatic renewal terms in a clear and conspicuous manner, prior to purchase;
• Complying with specific requirements governing how and when to display links to additional terms and conditions;
• Including a clear and conspicuous disclosure that states that by purchasing the good or service, the consumer agrees to enroll in an automatic renewal contract;
• Providing the consumer a written acknowledgment that includes the contract terms, the cancellation policy, and information regarding how to cancel;
• Periodically notifying the consumer that the automatic renewal contract will automatically renew unless the consumer cancels the contract, which notices must be provided at least 25 but not more than 40 days before the first and each subsequent automatic renewal; and
• Providing a simple, cost-effective, timely, and easy-to-use mechanism for canceling the contract.

Anyone offering subscriptions to Colorado consumers and businesses should be aware of the new requirements and be prepared to comply. If you’re unsure whether your subscription agreements or cancellation processes comply with Colorado law, Business Law Group can help assess your current practices and guide you through the required updates.

[1] 16 C.F.R. § 425

[2] Custom Commc’ns, Inc. v. FTC, 142 F.4th 1060 (8th Cir. 2025)

[3] Specifically, in the early stages of the rulemaking process, the FTC did not conduct or issue a cost-benefit analysis comparing the costs of the rule to any alternatives, which deprived the public of the opportunity to comment and raise objections. Id. at 1073

[4] C.R.S. § 6-1-732(1)(d)