FTC Business Blog Acc-cen-tuate the negative? (July 29, 2014)

Acc-cen-tuate the negative?

July 29, 2014

In a recent blog post, the Federal Trade Commission (“FTC”) emphasized the importance of clear communication for marketers using negative options. After reviewing the Negative Option Rule, the FTC has decided to maintain it without changes. This rule specifically applies to prenotification negative option plans, where consumers receive periodic announcements about upcoming shipments and have the opportunity to decline before being charged.

However, the post highlights that other forms of negative options, such as continuity plans, trial conversions, and automatic renewals, are not covered by this specific rule but are still governed by broader consumer protection laws, including the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA). ROSCA prohibits charging consumers through any negative option method unless businesses clearly disclose all material terms before obtaining billing information, secure express consent before charging, and provide straightforward cancellation options.

Additionally, the FTC mentioned proposed amendments to the Telemarketing Sales Rule (TSR) that aim to ban certain questionable payment methods often used in deceptive marketing practices. The agency's commitment to enforcing these regulations has resulted in actions against numerous marketers engaging in illegal negative option practices.

Overall, the FTC encourages businesses to ensure compliance with these regulations, emphasizing the need for transparency and consumer consent in all negative option marketing practices.

 

For more information, see here: https://www.ftc.gov/business-guidance/blog/2014/07/acc-cen-tuate-negative

 

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