[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 2072 Introduced in Senate (IS)]
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117th CONGRESS
1st Session
S. 2072
To increase consumer protection with respect to negative option offers
in all media, including on the internet, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 16, 2021
Mr. Schatz (for himself, Mr. Thune, Mr. Warnock, and Mr. Kennedy)
introduced the following bill; which was read twice and referred to the
Committee on Commerce, Science, and Transportation
_______________________________________________________________________
A BILL
To increase consumer protection with respect to negative option offers
in all media, including on the internet, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Unsubscribe Act of 2021''.
SEC. 2. INCREASED CONSUMER PROTECTION WITH RESPECT TO NEGATIVE OPTION
AGREEMENTS.
(a) Disclosure of Negative Options.--It shall be unlawful for any
person to charge or attempt to charge any consumer's credit card, debit
card, bank account, or other financial account, or otherwise receive
payment, through a negative option, unless the person clearly and
conspicuously discloses all material terms of the transaction before
obtaining the consumer's billing information or receiving payment,
whichever is earlier.
(b) Express Informed Consent for Negative Options.--It shall be
unlawful for any person to charge or attempt to charge any consumer's
credit card, debit card, bank account, or other financial account, or
otherwise receive payment, through a negative option, unless the person
obtains a consumer's express informed consent before receiving payment
or charging the consumer for products or services, or otherwise
receiving payment, through such transaction.
(c) Term Limitation for Negative Option Agreements.--After the
expiration of an introductory period, initial fixed period, or other
preliminary period, it shall be unlawful for any person to
automatically renew or otherwise continue a negative option agreement
with any consumer for a period greater than 1 month, unless such
person, at the time of such expiration, obtains a consumer's express
informed consent to renew or otherwise continue such agreement for a
period greater than 1 month.
(d) Cancellation of Negative Option Agreements.--It shall be
unlawful for any person to enter into a negative option agreement with
any consumer, unless the negative option agreement provides the
consumer with a simple mechanism to stop any recurring payments,
including the ability to cancel the agreement in the same manner, and
by the same means, into which the agreement was entered.
(e) Requirements for Free-to-Pay Conversion Contracts.--
(1) In general.--It shall be unlawful for any person to
charge or attempt to charge any consumer's credit card, debit
card, bank account, or other financial account for any good or
service sold in a free-to-pay conversion contract entered into,
unless each of the following is met:
(A) Before obtaining the consumer's billing
information, or otherwise receiving payment, the person
has obtained the consumer's express informed consent to
enter into the negative option contract and has
provided the consumer with a notification of the terms
of the negative option contract, including, but not
limited to, the following:
(i) For an introductory period, the
consumer will receive the good or service at no
cost or for a nominal cost.
(ii) After the introductory period, the
amount the consumer will be charged or
otherwise required to pay, including any cost
increase.
(iii) The total cost (or range of costs)
the consumer will be charged or otherwise
required to pay.
(B) Before the initial charge, payment, or initial
increase after the introductory period, the person
informs the consumer about the upcoming charge or
payment and provides the consumer with access to
information about the simple mechanisms to cancel the
contract.
(2) Mandatory notifications.--After the introductory period
in a free-to-pay conversion contract entered into between any
person and any consumer, and at regular intervals, as
determined by the Commission, but no less frequently than
annually, while the contract remains in effect, the person
shall provide the consumer with a notification of the terms of
the contract.
(f) Mandatory Notifications With Respect to Other Negative Option
Agreements.--
(1) Automatic renewal contracts.--With respect to an
automatic renewal contract entered into between any person and
any consumer--
(A) not later than 2 days and no more than 7 days
before the end of the initial fixed period in the
contract, the person shall provide the consumer with a
notification of the terms of the contract; and
(B) after the initial fixed period in the contract,
and at regular intervals, as determined by the
Commission, but no less frequently than annually, while
the contract remains in effect, the person shall
provide the consumer with a notification of the terms
of the contract and access to, or information about,
the simple mechanisms to cancel the contract.
(2) Continuity plan contracts.--With respect to a
continuity plan contract entered into between any person and
any consumer, the person shall provide the consumer with a
notification of the terms of the contract and access to
information about the simple mechanisms to cancel the contract
at regular intervals, as determined by the Commission, but no
less frequently than annually while the contract remains in
effect.
SEC. 3. ENFORCEMENT.
(a) By the Commission.--
(1) In general.--A violation of this Act shall be treated
as a violation of a rule issued under section 18(a)(1)(B) of
the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B))
regarding unfair or deceptive acts or practices. The Commission
shall enforce this Act in the same manner, by the same means,
and with the same jurisdiction, powers, and duties as though
all applicable terms and provisions of the Federal Trade
Commission Act (15 U.S.C. 41 et seq.) were incorporated into
and made a part of this Act.
(2) Penalties.--Any person who violates this Act shall be
subject to the penalties and entitled to the privileges and
immunities provided in the Federal Trade Commission Act as
though all applicable terms and provisions of the Federal Trade
Commission Act were incorporated in and made a part of this
Act.
(3) Authority preserved.--Nothing in this Act shall be
construed to limit the authority of the Commission under any
other provision of law.
(b) By State Attorneys General.--
(1) In general.--Except as provided in paragraph (5), the
attorney general of a State or other authorized State officer
alleging a violation of this Act that affects or may affect the
State or the residents of the State may bring an action on
behalf of the residents of the State in any United States
district court for the district in which the defendant is
found, resides, or transacts business, or wherever venue is
proper under section 1391 of title 28, United States Code, to
obtain appropriate injunctive relief.
(2) Notice to commission required.--A State shall provide
prior written notice to the Commission of any civil action
brought under paragraph (1) that includes a copy of the
complaint for the civil action, except that if providing such
prior notice is not feasible for the State, the State shall
provide notice immediately upon instituting the civil action.
(3) Intervention by the commission.--The Commission may
intervene in a civil action brought under paragraph (1) and
upon intervening--
(A) may be heard on all matters arising in the
civil action; and
(B) may file petitions for appeal of a decision in
the civil action.
(4) Construction.--Nothing in this subsection shall be
construed--
(A) to prevent the attorney general of a State or
other authorized State officer from exercising the
powers conferred on the attorney general or other
authorized State officer by the laws of the State; or
(B) to prohibit the attorney general of a State or
other authorized State officer from proceeding in State
or Federal court on the basis of an alleged violation
of any civil or criminal statute of that State.
(5) Limitation.--An action may not be brought under this
subsection if, at the time the action is brought, the same
alleged violation is the subject of a pending action by the
Commission or the United States.
SEC. 4. PREEMPTION OF DIRECTLY CONFLICTING STATE LAWS.
This Act shall supersede any State law to the extent such law
directly conflicts with the provisions of this Act, or a standard,
rule, or regulation promulgated under this Act, and then only to the
extent of such direct conflict. Any State law, rule, or regulation
shall not be considered in direct conflict if it affords a greater
level of protection to individuals protected under this Act.
SEC. 5. DEFINITIONS.
In this Act:
(1) Automatic renewal contract.--The term ``automatic
renewal contract'' means a contract between any person and any
consumer for a good or service that is automatically renewed
after an initial fixed period, unless the consumer instructs
otherwise.
(2) Commission.--The term ``Commission'' means the Federal
Trade Commission.
(3) Continuity plan contract.--The term ``continuity plan
contract'' means a contract between any person and any consumer
under which the consumer agrees to pay for periodic shipments
of goods or the provision of services, unless the consumer
instructs otherwise.
(4) Free-to-pay conversion contract.--The term ``free-to-
pay conversion contract'' means a contract between any person
and any consumer under which--
(A) for an introductory period, the consumer
receives a good or service at no charge or for a
nominal charge; and
(B) after the introductory period, the amount the
consumer will be charged or otherwise be required to
pay is increased for the good or service.
(5) Negative option.--The term ``negative option'' means--
(A) an offer or agreement to sell or provide any
goods or services, or a provision under which the
customer's silence or failure to take an affirmative
action to reject goods or services or to cancel the
agreement is interpreted by the seller as acceptance of
the offer, including but not limited to--
(i) an automatic renewal contract;
(ii) a continuity plan contract;
(iii) a free-to-pay conversion contract;
(iv) a pre-notification negative option
plan contract; or
(v) any combination of the contracts
described in clauses (i) through (iv).
(6) Notification.--The term ``notification'', when used
with respect to the terms of a contract, means a written
notification that clearly, conspicuously, and concisely states
all material terms of the negative option, including
information regarding the simple mechanisms for cancellation.
(7) Pre-notification negative option plan contract.--The
term ``pre-notification negative option plan contract'' means a
contract between any person and any consumer under which the
consumer receives periodic notices offering goods or services
and, unless the consumer specifically rejects the offer, the
consumer automatically receives the goods and services and
agrees to pay for such goods and services.
SEC. 6. EFFECTIVE DATE.
This Act shall apply with respect to contracts entered into after
the date that is 1 year after the date of the enactment of this Act.
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