Sending Office: Honorable Mark Takano
Supported by: Consumer Action, Consumer Federation of America, Truth in Advertising
We’ve all been there. You sign up online for an alluring “risk-free trial offer” that ends up being much costlier than you expected.
Cosponsor H.R. 2683, the Unsubscribe Act to better protect consumers from getting ripped off by expensive and misleading online deals.
Celebrity-endorsed fashion retailers like
AdoreMe, or credit monitoring services like
Credit Bureau Center are examples of companies that advertise deals, discounts, and convenience, but also unfairly lock consumers into expensive contracts packed with confusing fees and recurring costs. The sales tactic behind this sort of buyer-fleecing
is called “negative option billing.” The practice effectively
reverses the structure of a typical consumer purchase by allowing businesses to interpret a customer’s
lack of action to reject an offer as approval to be charged for the goods or services. Expensive obligations can go unnoticed or misunderstood to consumers for months while costs pile up. Customers seeking to terminate their purchase or enrollment
are often met with cumbersome and confusing cancellation and return policies.
Online deals like these have duped consumers out of more than
$1.3 billion during the last decade. Additionally, between 2015 and 2017, related complaints to the Federal Trade Commission (FTC) have more than
doubled. During the last two years, the agency levied over $285 million in judgments against online retailers that used negative option billing to trick consumers out of millions of dollars.
The Unsubscribe Act will hold companies accountable for deceptive marketing and ensure that buyers are less vulnerable to the confusing nature of online negative option agreements. The bill establishes or enhances three consumer protections
for online shoppers:
- Require a straightforward cancellation process: businesses are required to provide a cancellation mechanism that mirrors the customers’ method of enrollment. A simple “click-to-cancel” option allows buyers to escape an unwanted deal as
easily as they were lured into it.
- Prevent consumers from unwanted and costly contracts: in addition to receiving affirmed consent from the customer at the onset of the negative option deal, the seller must receive an additional notice of consent at the end of the trial
period, before any additional payment is collected. That means if a customer only intended on making a single purchase, but inadvertently enrolled in a pricey “membership” plan, the business cannot continue charging them unless they receive clear approval
from the customer.
- Ensure consumers remain fully informed of all costs and cancellation terms:
the bill mandates that consumers receive periodic notification of any and all obligations or changes to their contracts. Proactively reminding buyers of recurring charges, reenrollment details, and agreement changes will help decrypt the complex nature
of negative option agreements.
If you have any questions or would like to cosponsor this legislation, please contact Brien Courchene in Congressman Takano’s office at
email@example.com or 5-2305.
Member of Congress
e-Dear Colleague version 2.0