    [United States Statutes at Large, Volume 124, 111th Congress, 2nd Session]
    [From the U.S. Government Publishing Office, www.gpo.gov]

    Public Law 111-345
    111th Congress

    An Act

    To protect consumers from certain aggressive sales tactics on the
    Internet. <>

    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 ``Restore Online Shoppers' Confidence
    Act''.

    SEC. 2. FINDINGS; <> DECLARATION OF POLICY.

    The Congress finds the following:
    (1) The Internet has become an important channel of commerce
    in the United States, accounting for billions of dollars in
    retail sales every year. Over half of all American adults have
    now either made an online purchase or an online travel
    reservation.
    (2) Consumer confidence is essential to the growth of online
    commerce. To continue its development as a marketplace, the
    Internet must provide consumers with clear, accurate information
    and give sellers an opportunity to fairly compete with one
    another for consumers' business.
    (3) An investigation by the Senate Committee on Commerce,
    Science, and Transportation found abundant evidence that the
    aggressive sales tactics many companies use against their online
    customers have undermined consumer confidence in the Internet
    and thereby harmed the American economy.
    (4) The Committee showed that, in exchange for ``bounties''
    and other payments, hundreds of reputable online retailers and
    websites shared their customers' billing information, including
    credit card and debit card numbers, with third party sellers
    through a process known as ``data pass''. These third party
    sellers in turn used aggressive, misleading sales tactics to
    charge millions of American consumers for membership clubs the
    consumers did not want.
    (5) Third party sellers offered membership clubs to
    consumers as they were in the process of completing their
    initial transactions on hundreds of websites. These third party
    ``post-transaction'' offers were designed to make consumers
    think the offers were part of the initial purchase, rather than
    a new transaction with a new seller.
    (6) Third party sellers charged millions of consumers for
    membership clubs without ever obtaining consumers' billing
    information, including their credit or debit card information,
    directly from the consumers. Because third party sellers

    [[Page 3619]]

    acquired consumers' billing information from the initial
    merchant through ``data pass'', millions of consumers were
    unaware they had been enrolled in membership clubs.
    (7) The use of a ``data pass'' process defied consumers'
    expectations that they could only be charged for a good or a
    service if they submitted their billing information, including
    their complete credit or debit card numbers.
    (8) Third party sellers used a free trial period to enroll
    members, after which they periodically charged consumers until
    consumers affirmatively canceled the memberships. This use of
    ``free-to-pay conversion'' and ``negative option'' sales took
    advantage of consumers' expectations that they would have an
    opportunity to accept or reject the membership club offer at the
    end of the trial period.

    SEC. 3. PROHIBITIONS <> AGAINST CERTAIN UNFAIR AND
    DECEPTIVE INTERNET SALES PRACTICES.

    (a) Requirements for Certain Internet-Based Sales.--It shall be
    unlawful for any post-transaction third party seller 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 transaction
    effected on the Internet, unless--
    (1) before obtaining the consumer's billing information, the
    post-transaction third party seller has clearly and
    conspicuously disclosed to the consumer all material terms of
    the transaction, including--
    (A) a description of the goods or services being
    offered;
    (B) the fact that the post-transaction third party
    seller is not affiliated with the initial merchant,
    which may include disclosure of the name of the post-
    transaction third party in a manner that clearly
    differentiates the post-transaction third party seller
    from the initial merchant; and
    (C) the cost of such goods or services; and
    (2) the post-transaction third party seller has received the
    express informed consent for the charge from the consumer whose
    credit card, debit card, bank account, or other financial
    account will be charged by--
    (A) obtaining from the consumer--
    (i) the full account number of the account to
    be charged; and
    (ii) the consumer's name and address and a
    means to contact the consumer; and
    (B) requiring the consumer to perform an additional
    affirmative action, such as clicking on a confirmation
    button or checking a box that indicates the consumer's
    consent to be charged the amount disclosed.

    (b) Prohibition on Data-Pass Used To Facilitate Certain Deceptive
    Internet Sales Transactions.--It shall be unlawful for an initial
    merchant to disclose a credit card, debit card, bank account, or other
    financial account number, or to disclose other billing information that
    is used to charge a customer of the initial merchant, to any post-
    transaction third party seller for use in an Internet-based sale of any
    goods or services from that post-transaction third party seller.

    [[Page 3620]]

    (c) Application with Other Law.--Nothing in this Act shall be
    construed to supersede, modify, or otherwise affect the requirements of
    the Electronic Funds Transfer Act (15 U.S.C. 1693 et seq.) or any
    regulation promulgated thereunder.
    (d) Definitions.--In this section:
    (1) Initial merchant.--The term ``initial merchant'' means a
    person that has obtained a consumer's billing information
    directly from the consumer through an Internet transaction
    initiated by the consumer.
    (2) Post-transaction third party seller.--The term ``post-
    transaction third party seller'' means a person that--
    (A) sells, or offers for sale, any good or service
    on the Internet;
    (B) solicits the purchase of such goods or services
    on the Internet through an initial merchant after the
    consumer has initiated a transaction with the initial
    merchant; and
    (C) is not--
    (i) the initial merchant;
    (ii) a subsidiary or corporate affiliate of
    the initial merchant; or
    (iii) a successor of an entity described in
    clause (i) or (ii).

    SEC. 4. <> NEGATIVE OPTION MARKETING ON THE
    INTERNET.

    It shall be unlawful for any person to charge or attempt to charge
    any consumer for any goods or services sold in a transaction effected on
    the Internet through a negative option feature (as defined in the
    Federal Trade Commission's Telemarketing Sales Rule in part 310 of title
    16, Code of Federal Regulations), unless the person--
    (1) provides text that clearly and conspicuously discloses
    all material terms of the transaction before obtaining the
    consumer's billing information;
    (2) obtains a consumer's express informed consent before
    charging the consumer's credit card, debit card, bank account,
    or other financial account for products or services through such
    transaction; and
    (3) provides simple mechanisms for a consumer to stop
    recurring charges from being placed on the consumer's credit
    card, debit card, bank account, or other financial account.

    SEC. 5. <> ENFORCEMENT BY FEDERAL TRADE COMMISSION.

    (a) In General.--Violation of this Act or any regulation prescribed
    under this Act shall be treated as a violation of a rule under section
    18 of the Federal Trade Commission Act (15 U.S.C. 57a) regarding unfair
    or deceptive acts or practices. The Federal Trade 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.
    (b) Penalties.--Any person who violates this Act or any regulation
    prescribed under 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 part of this
    Act.

    [[Page 3621]]

    (c) Authority Preserved.--Nothing in this section shall be construed
    to limit the authority of the Commission under any other provision of
    law.

    SEC. 6. <> ENFORCEMENT BY STATE ATTORNEYS GENERAL.

    (a) Right of Action.--Except as provided in subsection (e), the
    attorney general of a State, or other authorized State officer, alleging
    a violation of this Act or any regulation issued under this Act that
    affects or may affect such State or its residents 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.
    (b) Notice to Commission Required.--A State shall provide prior
    written notice to the Federal Trade Commission of any civil action under
    subsection (a) together with a copy of its complaint, except that if it
    is not feasible for the State to provide such prior notice, the State
    shall provide such notice immediately upon instituting such action.
    (c) Intervention by the commission.--The Commission may intervene in
    such civil action and upon intervening--
    (1) be heard on all matters arising in such civil action;
    and
    (2) file petitions for appeal of a decision in such civil
    action.

    (d) Construction.--Nothing in this section shall be construed--
    (1) 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 such State; or
    (2) 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.

    (e) Limitation.--No separate suit shall be brought under this
    section if, at the time the suit is brought, the same alleged violation
    is the subject of a pending action by the Federal Trade Commission or
    the United States under this Act.

    Approved December 29, 2010.

    LEGISLATIVE HISTORY--S. 3386:
    ---------------------------------------------------------------------------

    SENATE REPORTS: No. 111-240 (Comm. on Commerce, Science, and
    Transportation).
    CONGRESSIONAL RECORD, Vol. 156 (2010):
    Nov. 30, considered and passed Senate.
    Dec. 15, considered and passed House.