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.
California Attorney General Rob Bonta, along with 25 other attorneys general, on Monday 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 cancellation, 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.
