From our friends at FKKS and their advertising law alert email newsletter, we learn of a recently enacted law, The Restore Online Shoppers’ Confidence Act, that will impact some common – and commonly abused – online marketing practices.
There are a couple of major provisions in the new law, but to me the one with the most impact centers on “negative options.”
Online marketers will now have more stringent rules to adhere to if they want to offer services or payment methods where a consumer’s silence or inaction is deemed to be acceptance of an offer. This is seenmost frequently in recurring billing scenarios.
There’s still room for legitimate subscriptions/recurring charges; marketers must now simply be aboveboard in disclosing the nature of the agreement and getting explicit permission from consumers. The new law now requires marketers to:
- clearly and conspicuously disclose all material terms and conditions of the transaction prior to obtaining the consumer’s billing information,
- obtain “express informed consent” from the consumer before charging the financial account provided by the consumer, and
- provide “simple mechanisms” for a consumer to cancel the recurring charges.
Violators can be pursued by the FTC and state Attorneys General.
All in all, a good thing for helping protect consumers and helping legitimate businesses separate themselves from shady operators.