For Immediate Release:
Wednesday, June 28, 2023
Contact: Nazneen Ahmed
(RALEIGH) Attorney General Josh Stein today supported the Federal Trade Commission’s proposed changes to its Negative Option Rule to better protect consumers. Companies use these negative options to enroll and re-enroll consumers in subscriptions, continuity plans and programs, and automatic renewals. These plans and programs do not require consent for each reoccurring charge. Sometimes, they claim that a person’s silence is consent.
The FTC’s proposed changes to the existing Negative Option Rule would provide more protections for people, clarify terms at enrollment, offer easy and immediate cancellation options, and remind people about upcoming charges.
“No one wants to be on the hook for something they didn’t know about and didn’t agree to pay for,” said Attorney General Josh Stein. “By adding these protections, we can make sure that businesses can’t trick people into these additional charges.”
The FTC is proposing the following changes:
- Applying the Rule to all forms of negative option marketing;
- Prohibiting misrepresentations of any material fact regarding the entire agreement;
- Requiring clear and conspicuous disclosures of certain information before obtaining a customer’s billing information;
- Requiring sellers to obtain express informed consent before charging customers;
- Requiring sellers to provide a simple mechanism for a customer to cancel a negative option subscription; and
- Requiring sellers to provide reminders concerning the frequency and amount of charges, and the means to cancel.
Attorney General Stein is joined in sending this bi-partisan letter by the Attorneys General from Alabama, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, New Jersey, New York, North Dakota, Oklahoma, Oregon, Pennsylvania, Vermont, Washington, and Wisconsin.
A copy of the letter can be found here.