(The Center Square) – As part of the Federal Trade Commission’s ongoing review of its 1973 Negative Option Rule, the FTC proposed in March amendments to the rule and asked for public comment on those changes.
Today, California Attorney General Rob Bonta, along with 25 other attorneys general, have submitted a letter of comment in support of the FTC’s proposed amendments in response to the request.
The Negative Option Rule covers business sales related to subscriptions, memberships and other recurring payment programs. Negative Option Offers allow businesses to interpret a consumer’s silence or failure to take affirmative action as an acceptance of an offer.
One of the rule changes is the “click to cancel” provision to make it just as easy for consumers to cancel unwanted subscriptions, as it was for them to sign up.
“If consumers want to cancel a subscription, they should not have to go on a fishing expedition,” said Attorney General Bonta. “Just as businesses make it easy to sign up for a subscription, they need to respect customers who later want to end that subscription.”
The FTC reports that one of the concerns expressed by consumers is “How the $%#& do I cancel?!” While signing up for a program is an easy seamless process, when it comes to cancelation consumers have to go through “obstacle courses designed for frustration and failure.”
Another complaint being addressed by the amendments is, “They signed me up, but never told me what was involved!” To address the lack of information, the FTC proposed that companies explain – payments would be recurring, the deadline to stop charges, payment amounts, billing date and cancelation information- all before requesting consumers’ billing information.
Consumers also asked, “Why am I getting all this unwanted stuff and who said these people could bill my credit card?!” To address this concern, companies would be required to spell out the details under the FTC’s new rule changes.
“The FTC’s proposed changes significantly broaden the requirements and risks for businesses using negative option features and will allow consumers to more easily cancel unwanted subscriptions and memberships,” a statement by the Department of Justice said.
The letter by the AGs supports the direction the FTC has proposed and makes suggestions for further clarifications:
- Require businesses offering free trials to obtain an additional round of consent before charging a consumer at the completion of the free trial;
- Clarify that cancellation mechanisms must be cost-effective, timely, and easy to use;
- Broaden the forms that a consumer can cancel a recurring contract; and
- Require businesses to provide negative option reminders in additional forms, not just through the same medium that the consumer used to consent to the negative option feature in the first place.
“Deception and dark patterns have no place in consumer markets, and the proposed Negative Option Rule is the change consumers have been rightly demanding for years. I’m proud to support this effort by the FTC and to offer additional recommendations alongside my fellow attorneys general,” Bonta said.
In sending this comment letter, Attorney General Bonta joins the attorneys general of Alabama, Arizona, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, New Jersey, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Vermont, Washington, and Wisconsin.
