[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 3298 Introduced in Senate (IS)]

<DOC>






117th CONGRESS
  1st Session
                                S. 3298

 To provide for automatic renewal protections, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            December 1, 2021

Mr. Van Hollen introduced the following bill; which was read twice and 
   referred to the Committee on Commerce, Science, and Transportation

_______________________________________________________________________

                                 A BILL


 
 To provide for automatic renewal protections, 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 ``Consumer Online Payment Transparency 
and Integrity Act''.

SEC. 2. AUTOMATIC RENEWAL PROTECTIONS.

    (a) In General.--A person who sells a good or service to a consumer 
pursuant to a contract that includes a free-to-pay conversion or 
negative option feature or any other automatic renewal provision shall 
disclose such feature or provision and the cancellation procedure 
clearly and conspicuously in the contract.
    (b) Automatic Renewal.--A person who sells a good or service to a 
consumer pursuant to a contract that will automatically renew unless 
the consumer cancels the contract, shall--
            (1) notify, in the same manner as the consumer entered into 
        the contract, the consumer of--
                    (A) the first automatic renewal (and of each 
                automatic renewal thereafter) not less than 7 days (or 
                a longer time period as determined appropriate by the 
                Commission) before the commencement of the renewal 
                period; and
                    (B) how the consumer may cancel the contract, which 
                shall include--
                            (i) an online mechanism for cancellation 
                        provided by the person; and
                            (ii) a toll-free telephone number, email 
                        address, postal mail address, or other cost-
                        effective, timely, and easy-to-use mechanism 
                        for cancellation provided by the person;
            (2) on an annual basis and notwithstanding the consumer's 
        consent to the initial term (or any subsequent term), obtain 
        the consumer's express informed consent to renew the contract 
        before charging the consumer for the renewal; and
            (3) notwithstanding the consumer's consent to the initial 
        term (or any subsequent term), in the event that the person has 
        actual knowledge that the consumer has not used the good or 
        service provided under the contract for a period of 6 
        consecutive months since the consumer's most recent express 
        informed consent--
                    (A) obtain the consumer's express informed consent 
                to the automatic renewal before charging the consumer 
                for the automatic renewal; and
                    (B) notify the consumer that the consumer has a 
                right to terminate the contract and receive a prorated 
                refund for the remaining portion of contract.
    (c) Free Trial.--A person who sells a good or service to a consumer 
pursuant to a contract that includes a free-to-pay conversion feature 
with a free trial period, shall--
            (1) notify, in the same manner as the consumer entered into 
        the contract, the consumer of--
                    (A) the automatic renewal not less than 7 days (or 
                a longer time period as determined appropriate by the 
                Commission) before the expiration of the free trial 
                period; and
                    (B) how the consumer may cancel the contract, which 
                shall include--
                            (i) an online mechanism for cancellation 
                        provided by the person; and
                            (ii) a toll-free telephone number, email 
                        address, postal mail address, or other cost-
                        effective, timely, and easy-to-use mechanism 
                        for cancellation provided by the person; and
            (2) notwithstanding the consumer's consent to the free 
        trial, obtain the consumer's express informed consent to the 
        automatic renewal not less than 7 days (or a longer time period 
        as determined appropriate by the Commission) before the 
        expiration of the free trial period and before charging the 
        consumer for the automatic renewal.
    (d) Automatic Renewal Void.--In the case of a violation of 
subsection (a), (b), or (c)--
            (1) the applicable automatic renewal provision shall be 
        void, and the contract shall terminate upon the occurrence of 
        such violation; and
            (2) the person who violated subsection (a), (b), or (c) 
        shall provide the consumer with a refund for all amounts paid 
        by the consumer due to such violation.
    (e) Dark Patterns.--With respect to a contract that includes a 
free-to-pay conversion or negative option feature or any other 
automatic renewal provision, a consumer's consent obtained through the 
use of dark patterns shall not be considered express informed consent.
    (f) Exemptions.--The requirements under subsections (a), (b), (c), 
and (d) shall not apply to a service contract or any other person or 
contract determined appropriate by the Commission.
    (g) Effective Date.--The requirements under this section shall take 
effect on the date that is 1 year after the date of enactment of this 
Act.

SEC. 3. ENFORCEMENT BY THE COMMISSION.

    (a) Unfair or Deceptive Acts or Practices.--A violation of section 
2 or a rule promulgated under this Act shall be treated as a violation 
of a rule defining an unfair or a deceptive act or practice under 
section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 
57a(a)(1)(B)).
    (b) Powers of the Commission.--
            (1) In general.--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) Privileges and immunities.--Any person who violates 
        section 2 or a rule promulgated under this Act shall be subject 
        to the penalties and entitled to the privileges and immunities 
        provided in the Federal Trade Commission Act (15 U.S.C. 41 et 
        seq.).
            (3) Authority preserved.--Nothing in this Act shall be 
        construed to limit the authority of the Federal Trade 
        Commission under any other provision of law.
            (4) Rulemaking.--The Commission shall promulgate in 
        accordance with section 553 of title 5, United States Code, 
        such rules as may be necessary to carry out this Act, or to 
        prevent unfair or deceptive acts or practices regarding free 
        trials, automatic renewals, or other contracts under which a 
        consumer's silence or failure to take an affirmative action to 
        reject goods or services or to cancel an agreement is 
        interpreted by the seller as acceptance of the offer.

SEC. 4. DEFINITIONS.

    In this Act:
            (1) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
            (2) Consumer.--The term ``consumer'' means any person who 
        seeks or acquires, by purchase or lease, any goods or services.
            (3) Dark patterns.--The term ``dark patterns'' means a user 
        interface that has the substantial effect of subverting or 
        impairing user autonomy, decision making, or choice.
            (4) Free-to-pay conversion.--The term ``free-to-pay 
        conversion'' has the meaning given that term in section 310.2 
        of title 16, Code of Federal Regulations.
            (5) Negative option feature.--The term ``negative option 
        feature'' has the meaning given that term in section 310.2 of 
        title 16, Code of Federal Regulations.
            (6) Service contract.--The term ``service contract'' means 
        a contract or agreement for a separately stated consideration 
        for any duration--
                    (A) to perform the repair, replacement, or 
                maintenance of property or indemnification for service 
                repair, replacement, or maintenance for the operational 
                or structural failure of any motor vehicle or 
                residential or other property due to a defect in 
                materials, workmanship, accidental damage from 
                handling, or normal wear and tear; or
                    (B) to indemnify for the same, including towing, 
                rental, or emergency road service or road hazard 
                protection, and which may provide for the service 
                repair, replacement, or maintenance of property for 
                damage resulting from power surges or interruption.
                                 <all>