“A bill to provide for automatic renewal protections, and for other purposes.”
No CRS summary available for this bill.
This section establishes consumer protections for contracts containing automatic renewal provisions, free-to-pay conversions, or negative option features. Sellers must (1) disclose the feature and simple cancellation procedures (i.e., online mechanism, toll-free telephone number, email, postal mail, or other easy mechanism) clearly and conspicuously; (2) for automatic renewals, notify consumers at least 7 days (or longer, as determined by the FTC) before each renewal (including the first) using the same medium as contract entry, obtain annual express informed consent notwithstanding prior consent, and if the consumer has not used the good or service for 6 consecutive months, obtain consent before charging and offer contract termination with a prorated refund; and (3) for free trials, provide similar notice and obtain express informed consent at least 7 days before charging or expiration. Violations void the renewal provision, terminate the contract, and require full refunds; consent via dark patterns is invalid. The FTC may exempt certain service contracts, and requirements take effect one year after enactment.
This section establishes Federal Trade Commission (FTC) enforcement authority for this Act by (1) treating violations of section 2 or rules promulgated under this Act as violations of a rule defining an unfair or deceptive act or practice under section 18(a)(1)(B) of the FTC Act (15 U.S.C. 57a(a)(1)(B)); (2) incorporating all applicable terms, powers, jurisdiction, duties, penalties, privileges, and immunities of the FTC Act (15 U.S.C. 41 et seq.); (3) preserving the FTC's authority under other laws; and (4) directing the FTC to promulgate necessary rules in accordance with APA notice-and-comment procedures (5 U.S.C. §553), including rules to prevent unfair or deceptive acts or practices regarding free trials, automatic renewals, or other contracts under which a consumer's silence or inaction is interpreted as acceptance.
This section defines terms for purposes of the Act: (1) Commission, meaning the Federal Trade Commission; (2) consumer, meaning any person who seeks or acquires goods or services by purchase or lease; (3) dark patterns, meaning a user interface that subverts or impairs user autonomy, decision making, or choice; (4) free-to-pay conversion and (5) negative option feature, each having the meaning given in 16 CFR 310.2; (6) service contract, meaning a contract for repair, replacement, or maintenance of property (or indemnification therefor), including for motor vehicles or residential property due to defects, wear and tear, power surges, towing, or road hazards; and (7) simply cancel, meaning a contract cancellation mechanism at least as easy to use as the consent mechanism.