Consumer Online Payment Transparency and Integrity Act
This bill requires the seller of a good or service that includes certain automatic renewal or free-to-pay conversion features to provide consumers with (1) advance notice of the renewal or conversion, (2) an online mechanism for canceling the contract for the good or service, and (3) additional contact information (e.g., toll-free telephone number) for canceling the contract.
Additionally, notwithstanding the consumer's consent to the initial term, the seller of a good or service that includes an automatic renewal contract must obtain the consumer's express informed consent to renew the contract on an annual basis prior to charging the consumer for the renewal.
Notwithstanding the consumer's consent to a free trial, the seller of a good or service that includes a free-to-pay conversion feature must obtain the consumer's express informed consent to renew the contract not less than seven days before the expiration of the free trial period and before charging the consumer for the renewal.
The bill provides for enforcement of these requirements by the Federal Trade Commission.
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2460 Introduced in House (IH)]
<DOC>
118th CONGRESS
1st Session
H. R. 2460
To provide for automatic renewal protections, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 3, 2023
Ms. Clarke of New York introduced the following bill; which was
referred to the Committee on Energy and Commerce
_______________________________________________________________________
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 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>
Introduced in House
Introduced in House
Referred to the House Committee on Energy and Commerce.
Referred to the Subcommittee on Innovation, Data, and Commerce.
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