The FTC has announced its intent to impose additional stringent restrictions on negative option programs by issuing a Notice of Proposed Rulemaking for the Negative Option Rule. The FTC’s revisions would broaden the rule’s scope to apply to all automatic renewal programs, continuity offers, and free-to-pay/fee-to-pay conversions, in addition to pre-notification negative option plans. The rule would require companies to provide specific express disclosures, obtain the consumer’s “unambiguously affirmative consent” to the negative option feature offer separately from any other portion of the transaction, obtain the consumer’s “unambiguously affirmative consent” to the rest of the transaction, and provide a one-click cancellation mechanism that mirrors the enrollment mechanism and allows customers to immediately cancel the recurring charges, without any retention efforts unless the customer consents to the efforts.
Join Venable partners Shahin Rothermel and Ari Rothman, who will discuss the new requirements, how companies can respond to the notice, and how the rule will impact negative option marketers.