Section 1 Short title
This Act may be cited as the “Unsubscribe Act of 2021”.
Unsubscribe Act of 2021
A BILL
To increase consumer protection with respect to negative option offers in all media, including on the internet, and for other purposes.
Sec. 2 Increased consumer protection with respect to negative option agreements
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.
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.
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.
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.
Requirements for free-to-Pay conversion contracts—
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:
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:
For an introductory period, the consumer will receive the good or service at no cost or for a nominal cost.
After the introductory period, the amount the consumer will be charged or otherwise required to pay, including any cost increase.
The total cost (or range of costs) the consumer will be charged or otherwise required to pay.
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.
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.
Mandatory notifications with respect to other negative option agreements—
Automatic renewal contracts— With respect to an automatic renewal contract entered into between any person and any consumer—
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
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.
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
By the Commission—
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.
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.
Authority preserved— Nothing in this Act shall be construed to limit the authority of the Commission under any other provision of law.
By State Attorneys General—
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.
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.
Intervention by the Commission— The Commission may intervene in a civil action brought under paragraph (1) and upon intervening—
may be heard on all matters arising in the civil action; and
may file petitions for appeal of a decision in the civil action.
Construction— Nothing in this subsection shall be construed—
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
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.
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:
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.
Commission— The term Commission means the Federal Trade Commission.
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.
Free-to-pay conversion contract— The term free-to-pay conversion contract means a contract between any person and any consumer under which—
for an introductory period, the consumer receives a good or service at no charge or for a nominal charge; and
after the introductory period, the amount the consumer will be charged or otherwise be required to pay is increased for the good or service.
Negative option— The term negative option means—
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—
an automatic renewal contract;
a continuity plan contract;
a free-to-pay conversion contract;
a pre-notification negative option plan contract; or
any combination of the contracts described in clauses (i) through (iv).
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.
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.