1 

Enforcement Policy Statement Regarding Negative Option Marketing

I. Introduction and Background

The Federal Trade Commission (“FTC” or “Commission”) issues this Policy Statement

to provide guidance regarding its enforcement of various statutes and FTC regulations addressing

negative option marketing and operating.

1

 This Statement is intended to assist the business 

community and practitioners by providing specific guidance on the Commission’s interpretation 

of existing law as it applies to negative option practices. This Statement may also assist the 

courts in developing an appropriate framework for interpreting and applying the various statutes 

and regulations addressing negative option marketing discussed herein. 

Negative option offers come in a variety of forms, but all share a central feature: each 

contains a term or condition under which the seller may interpret a consumer’s silence or failure 

to take affirmative action to reject a good or service or to cancel the agreement as acceptance or 

continuing acceptance of the offer.

2

 Typically, negative option arrangements include, but are not 

limited to, automatic renewals, continuity plans, free-to-pay or fee-to-pay conversions, and 

prenotification plans. Automatic renewals allow sellers (e.g., a magazine publisher) to 

 

1 This Policy Statement elaborates on principles annunciated by the Commission in individual 

cases and rules issued over the course of many years. This Policy Statement does not confer any 

rights on any person and does not operate to bind the FTC or the public. In any enforcement 

action, the Commission must prove the challenged act or practice violates one or more existing 

statutory or regulatory requirements. In addition, this Policy Statement does not preempt federal, 

state, or local laws. Compliance with those laws, however, will not necessarily preclude 

Commission law enforcement action under the FTC Act or other statutes. Pursuant to the 

Congressional Review Act (5 U.S.C. § 801 et seq.), the Office of Information and Regulatory 

Affairs designated this Policy Statement as not a “major rule,” as defined by 5 U.S.C. § 804(2). 

2

 The Commission’s Telemarking Sales Rule (16 C.F.R. Part 310) defines a negative option 

feature as a provision in an offer or agreement to sell or provide any goods or services “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.” 16 C.F.R. § 

310.2(w). 
2

unilaterally renew consumers’ subscriptions when they expire, unless consumers affirmatively 

cancel their subscriptions by a certain date. Continuity plans allow consumers to agree in 

advance to receive periodic shipments of goods or provision of services (e.g., bottled water 

delivery), which they continue to receive until they cancel the agreement. Free trial marketing

(e.g., free-to-pay conversions) provides consumers the opportunity to receive goods or services 

for free (or at a nominal fee) for a trial period. After the trial period, sellers can automatically 

begin charging a fee (or higher fee) unless consumers affirmatively cancel or return the goods or 

services. Finally, under prenotification plans3 (e.g., book-of-the-month clubs), sellers provide 

periodic notices offering goods to participating consumers and then send—and charge for—those 

goods only if the consumers take no action to decline the offer. The periodic announcements and 

shipments can continue indefinitely.4

Negative option programs are widespread in the marketplace and can provide substantial 

benefits for sellers and consumers. At the same time, consumers suffer costs when marketers fail 

to make adequate disclosures, bill consumers without their consent, or make cancellation 

difficult or impossible. Over the years, unfair or deceptive negative option practices have 

remained a persistent source of consumer harm, often saddling shoppers with recurring payments 

for products and services they did not intend to purchase or did not want to continue to 

purchase.5

 To address this problem, the Commission and states regularly bring cases 

 3 The Commission’s Rule on the “Use of Prenotification Negative Option Plans” (16 C.F.R. Part 

425) only covers this type of negative option marketing.

4 In addition, some negative option offers include upsell or bundled offers, where sellers use 

consumers’ billing data to sell additional products from the same seller or pass consumers’ 

billing data to a third party for their sales. An upsell occurs when a consumer completes a first 

transaction and then receives a second solicitation for an additional product or service. A 

bundled offer occurs when a seller packages two or more products or services together so that 

they cannot be purchased separately. 

5 See, e.g., n. 6 infra.
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challenging a variety of harmful negative option practices. These matters involve a range of 

deceptive or unfair practices, including inadequate disclosures of hidden charges in ostensibly 

“free” offers and other products or services, enrollment without consumer consent, and 

inadequate or overly burdensome cancellation and refund procedures.6

 In addition, the 

Commission receives thousands of complaints each year related to negative option marketing. 

The number of ongoing cases and high volume of complaints demonstrate there is prevalent, 

unabated consumer harm in the marketplace.

The FTC’s enforcement actions primarily rely on Section 5 of the FTC Act (15 U.S.C. 

§ 45(a)), the Restore Online Shoppers’ Confidence Act (“ROSCA”) (15 U.S.C. §§ 8401-8405), 

and the Telemarketing Sales Rule (16 C.F.R. Part 310). However, the Rule on the Use of 

Prenotification Negative Option Plans (16 C.F.R. Part 425), the Electronic Fund Transfer Act 

(“EFTA”) (15 U.S.C. §§ 1693-1693r), and the Postal Reorganization Act (i.e., the Unordered 

Merchandise Statute) (39 U.S.C. § 3009) also address various aspects of negative option 

marketing. 

 6 Recent examples of these matters include: FTC v. JDI Dating, Ltd., No. 1:14-cv-08400 (N.D. 

Ill. 2014); FTC, State of Illinois, and State of Ohio v. One Technologies, LP, No. 3:14-cv-05066 

(N.D. Cal. 2014); FTC v. Health Formulas, LLC, No. 2:14-cv-01649-RFB-GWF (D. Nev. 2016); 

FTC v. BunZai Media Group, Inc., No. 2:15-cv- 04527-GW-PLA (C.D. Cal. 2015); FTC v. 

NutraClick LLC, No. 2:16-cv-06819-DMG-JPR (C.D. Cal. 2016) (NutraClick I); FTC v. 

DOTAuthority.com, Inc., No. 0:16-cv-62186-WJZ (S.D. Fla. 2016); FTC v. XXL Impressions,

No. 1:17-cv-00067-NT (D. Me. 2017); FTC v. AAFE Products Corp., No. 3:17-cv-00575 (S.D. 

Cal. 2017); FTC v. RevMountain, LLC, No. 2:17-cv-02000-APG-GWF (D. Nev. 2017); FTC v. 

Pact, Inc., No. 2:17-cv-01429 (W.D. Wash. 2017); FTC v. Tarr, No. 3:17-cv-02024-LAB-KSC 

(S.D. Cal. 2017); FTC v. Credit Bureau Center, LLC, No. 17-cv-00194 (N.D. Ill. 2017); FTC v. 

AdoreMe, Inc., No. 1:17-cv-09083 (S.D.N.Y. 2017); FTC v. Triangle Media Corp., No. 3:18-cv01388-LAB-LL (S.D. Cal. 2018); In re: UrthBox, Inc., No. C-4676 (FTC 2019); FTC v. Elite IT 

Partners, Inc., No. 2:19-cv-00125-RJS (D. Utah 2019); FTC v. Apex Capital Group, LLC, No. 

2:18-cv-09573-JFW-JPR (C.D. Cal. 2018); FTC v. AH Media, No. 3:19-cv-04022-JD (N.D. Cal. 

2019); FTC v. Age of Learning, Inc., No. 2:20-cv-07996 (C.D. Cal. 2020); FTC v. NutraClick, 

LLC, No. 2:20-cv-08612 (C.D. Cal. 2020) (NutraClick II).
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Section 5 of the FTC Act: Section 5 of the FTC Act, which prohibits unfair or deceptive 

acts or practices, is the core consumer protection statute enforced by the Commission, and

therefore, has traditionally served as the primary mechanism for addressing deceptive negative 

option claims.7 In its guidance and cases, the FTC has highlighted four basic Section 5 

requirements that negative option marketing must follow to comply with Section 5.

8

 First, 

marketers must clearly and conspicuously disclose the material terms of a negative option offer

including, at a minimum, key terms such as the existence of the negative option offer, the offer’s 

total cost, and how to cancel the offer.9 Second, sellers must disclose these material terms before 

consumers agree to the purchase.

10 Third, marketers must obtain consumers’ express informed 

 7 Section 5 specifically states that “unfair or deceptive acts or practices in or affecting commerce 

. . . are . . . declared unlawful.” The FTC Act defines “unfair or deceptive acts or practices” to 

include such acts or practices involving foreign commerce that cause or are likely to cause 

reasonably foreseeable injury within the United States or involve material conduct occurring 

within the United States (15 U.S.C. § 45(a)(4)(A)). It also defines “unfair” practices as those 

that cause or are likely “to cause substantial injury to consumers which is not reasonably 

avoidable by consumers themselves and not outweighed by countervailing benefits to consumers 

or to competition” (15 U.S.C. § 45(n)).

8 See Negative Options: A Report By the Staff of the FTC’s Division of Enforcement, 26-29 (Jan. 

2009), https://www.ftc.gov/sites/default/files/documents/reports/negative-options-federal-tradecommission-workshop-analyzing-negative-option-marketing-reportstaff/p064202negativeoptionreport.pdf. In discussing the principal Section 5 requirements 

related to negative options, the report cites to the following pre-ROSCA cases, FTC v. JAB 

Ventures, No. CV08-04648 (C.D. Cal. 2008); FTC v. Complete Weightloss Center, No. 

1:08cv00053 (D.N.D. 2008); FTC v. Berkeley Premium Nutraceuticals, No. 1:06cv00051 (S.D. 

Ohio 2006); FTC v. Think All Publ’g, No. 4:07cv11 (E.D. Tex. 2006); FTC v. Hispanexo, No. 

1:06cv424 (E.D. Va. 2006); FTC v. Consumerinfo.com, No. SACV05-801 (C.D. Cal. 2005); 

FTC v. Conversion Mktg., No. SACV04-1264 (C.D. Cal. 2004); FTC v. Mantra Films, No. 

CV03-9184 (C.D. Cal. 2003); FTC v. Preferred Alliance, No. 103-CV0405 (N.D. Ga. 2003); 

United States v. Prochnow, No. 1:02-CV-0917 (N.D. Ga. 2002); FTC v. Ultralife Fitness, Inc., 

No. 2:08-cv-07655-DSF-PJW (C.D. Cal. 2008); In the Matter of American Isuzu Motors, No. C3712 (FTC 1997); FTC v. Universal Premium Services, No. CV06-0849 (C.D. Cal. 2006); FTC 

v. Remote Response, No. 06-20168 (S.D. Fla. 2006); and FTC’s Dot Com Disclosures guidance. 9 See, e.g., FTC v. JAB Ventures; FTC v. Complete Weightloss Center; FTC v. NutraClick, LLC I. 10 See, e.g., FTC v. JAB Ventures; Complete Weightloss Center; FTC v. Berkeley Premium 

Nutraceutical; FTC v. Think All Publ’g. Disclosures earlier in the transaction may be necessary 

to avoid deception. See e.g., FTC’s Dot Com Disclosures guidance.
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consent to such offers.11 Finally, marketers must not erect unreasonable barriers to cancellation 

or impede the effective operation of promised cancellation procedures, and must honor 

cancellation requests that comply with such procedures.12 Although these basic guidelines are 

useful, the legality of a particular negative option depends on an individualized assessment of the 

advertisement’s net impression and the marketer’s business practices.13

ROSCA: Enacted by Congress in 2010 to address ongoing problems with online negative 

option marketing, ROSCA prohibits charging or attempting to charge consumers for goods or 

services sold on the Internet through any negative option feature14 unless the marketer: (1) 

clearly and conspicuously discloses all material terms of the transaction15 before obtaining the 

consumer’s billing information; (2) obtains a consumer’s express informed consent before 

 11 E.g., FTC. v. Neovi, Inc., 604 F.3d 1150, 1157-59 (9th Cir. 2010), amended by 2010 WL 

2365956 (9th Cir. June 15, 2010); FTC v. Amazon.com, Inc., No. C14-1038-JCC, 2016 WL 

10654030, at *8 (W.D. Wash. Apr. 26, 2016); FTC v. Ideal Fin. Sols., Inc., No. 2:13-CV-00143-

JAD, 2015 WL 4032103, at *8 (D. Nev. June 29, 2015); FTC v. BunZai Media Group, Inc.

12 See, e.g., FTC v. Universal Premium Services; FTC v. Remote Response; FTC v. Berkeley 

Premium Nutraceuticals; FTC v. Hispanexo; FTC v. Age of Learning, Inc. 13 See, e.g., Negative Options: A Report By the Staff of the FTC’s Division of Enforcement, 28.

14 15 U.S.C. § 8403. ROSCA incorporates the definition of “negative option feature” from the 

Commission’s Telemarketing Sales Rule, 16 C.F.R. § 310.2(w). ROSCA also contains a finding 

that “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 “freeto-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.” 15 U.S.C. § 8401(8). Finally, in addition to addressing negative option marketing, 

ROSCA contains provisions related to third party “post transaction” offers. See, e.g., 15 U.S.C.

§ 8402. 15 The Commission has brought several cases alleging a failure to disclose adequately the terms 

of the negative option feature. See, e.g., FTC v. NutraClick II; FTC v. Triangle Media 

Corporation; FTC v. AAFE Products Corp. The Commission recently alleged that failure to 

disclose a material term of the underlying service that was necessary to prevent deception 

violated this provision of ROSCA. In re: MoviePass, Inc., No. C-4751 (October 5, 2021).
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charging the consumer’s account; 16 and (3) provides simple mechanisms for the consumer to 

stop recurring charges.17 

ROSCA also addresses offers made by, or on behalf of, third-party sellers during, or 

immediately following, a transaction with an initial merchant. Specifically, ROSCA prohibits 

post-transaction, third-party sellers18 from charging or attempting to charge consumers unless the 

seller: (1) before obtaining billing information, clearly and conspicuously discloses the offer’s 

material terms; and (2) receives the consumer’s express informed consent by obtaining the 

consumer’s name, address, contact information, as well as the full account number to be charged, 

and requiring the consumer to perform an additional affirmative action indicating consent.19 

ROSCA also prohibits initial merchants from disclosing billing information to any posttransaction third-party seller for use in any Internet-based sale of goods or services.20

Furthermore, ROSCA provides that a violation of that Act is a violation of a Commission 

trade regulation rule under Section 18 of the FTC Act.21 Thus, the Commission may seek a 

variety of remedies for violations of ROSCA, including civil penalties under Section 5(m)(1)(A) 

of the FTC Act;22 injunctive relief under Section 13(b) of the FTC Act;23 and consumer redress,

 16 See, e.g., FTC v. BunZai Media Group, Inc.; FTC v. Health Formulas, LLC; and FTC v. JDI 

Dating, Ltd. 17 See, e.g., FTC v. Age of Learning, Inc.; FTC v. AdoreMe, Inc.; and FTC, State of Illinois, and 

State of Ohio v. One Technologies. 18 ROSCA defines “post-transaction third-party seller” as a person other than the initial merchant 

who sells any good or service on the Internet and solicits the purchase on the Internet through an 

initial merchant after the consumer has initiated a transaction with the initial merchant. 15 

U.S.C. § 8402(d)(2).

19 15 U.S.C. § 8402(a).

20 15 U.S.C. § 8402(b).

21 15 U.S.C. § 8404. Section 18 of the FTC Act is 15 U.S.C. § 57a.

22 15 U.S.C. § 45(m)(1)(A).

23 15 U.S.C. § 53(b).
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such as damages, and other relief under Section 19 of the FTC Act.24 Although Congress 

charged the Commission with enforcing ROSCA, it did not direct the FTC to promulgate 

implementing regulations.25 

Telemarketing Sales Rule: The TSR prohibits deceptive telemarketing acts or practices, 

including those involving negative option offers, and certain types of payment methods common 

in deceptive negative option marketing. Specifically, the TSR requires telemarketers to disclose 

all material terms and conditions of the negative option feature, including the need for 

affirmative consumer action to avoid the charges, the date (or dates) the charges will be 

submitted for payment, and the specific steps the customer must take to avoid the charges. It 

also prohibits telemarketers from misrepresenting such information and contains specific 

requirements related to payment authorization.26 Finally, the TSR prohibits the use of payment 

methods often used in deceptive marketing, including negative options, such as remotely created 

checks.27 The Rule, however, only applies to negative option offers made over the telephone. 

Prenotification Plan Rule: The Commission promulgated the “Use of Prenotification 

Negative Option Plans” Rule (“Prenotification Plan Rule”) (16 C.F.R. Part 425).

28 The 

Prenotification Plan Rule requires sellers of such plans to clearly and conspicuously disclose 

 24 15 U.S.C. § 57b(a)(1) and (b).

25 ROSCA states that a violation “of this chapter or any regulation prescribed under this chapter 

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.” 15 U.S.C. § 8404(a).

26 16 C.F.R. Part 310.3(a).

27 80 Fed. Reg. 77520 (Dec. 14, 2015). The TSR Notice of Proposed Rulemaking (78 Fed. Reg.

41200 (July 9, 2013)) noted negative option cases where the defendants used unauthorized 

remotely created checks. E.g., FTC v. FTN Promotions, Inc., Civ. No. 8:07-1279 (M.D. Fla. 

Dec. 30, 2008) (Stip. Perm. Inj.) (defendants allegedly caused more than $171 million in 

unauthorized charges to consumers’ accounts for bogus travel and buyers’ clubs in part by using 

unauthorized remotely created checks).

28 The Commission issued the Rule after finding some negative option marketers committed 

unfair and deceptive practices that violated Section 5 of the Act, 15 U.S.C. § 45. 
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their plan’s material terms before consumers subscribe. It enumerates seven material terms 

sellers must disclose: (1) how subscribers must notify the seller if they do not wish to purchase 

the selection; (2) any minimum purchase obligations; (3) the subscribers’ right to cancel; (4) 

whether billing charges include postage and handling; (5) that subscribers have at least ten days 

to reject a selection; (6) that, if any subscriber is not given ten days to reject a selection, the seller 

will credit the return of the selection and postage to return the selection, along with shipping and 

handling; and (7) the frequency with which announcements and forms will be sent.29 In 

addition, sellers must provide particular periods during which they will send introductory 

merchandise, give consumers a specified period to respond to announcements, provide 

instructions for rejecting merchandise in announcements, and promptly honor written 

cancellation requests.30

The Prenotification Plan Rule applies only to plans like book-of-the-month clubs in 

which sellers provide periodic notices offering goods to participating consumers and then send—

and charge for—those goods only if the consumers take no action to decline the offer. These 

types of plans, however, account for only a small fraction of current negative option marketing. 

Therefore, the Rule does not reach most modern negative option marketing.31 

 29 16 C.F.R. § 425.1(a)(1)(i)-(vii).

30 16 C.F.R. §§ 425.1(a)(2) and (3); § 425.1(b).

31 The Prenotification Plan Rule defines “negative option plan” narrowly to apply only to 

prenotification plans. 16 C.F.R. § 425.1(c)(1). In 1998, the Commission clarified the Rule’s 

application to such plans in all media, stating that it “covers all promotional materials that 

contain a means for consumers to subscribe to prenotification negative option plans, including 

those that are disseminated through newer technologies . . . .” 63 Fed. Reg. 44555, 44561 (Aug. 

20, 1998). In 2017, the Commission estimated that fewer than 100 sellers (“clubs”) were subject 

to the current Rule’s requirements. 82 Fed. Reg. 38907, 38908 (Aug. 16, 2017).
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Other Relevant Requirements: EFTA32 and the Unordered Merchandise Statute33 also 

contain provisions relevant to negative option marketing. EFTA prohibits sellers from imposing 

recurring charges on a consumer’s debit cards or bank accounts without written authorization. 

The Unordered Merchandise Statute provides that mailing unordered merchandise, or a bill for 

such merchandise, constitutes an unfair method of competition and an unfair trade practice in 

violation of Section 5 of the FTC Act.

II. Principles For Negative Option Marketing 

Given the number of applicable statutory and regulatory requirements and the ongoing 

problems in the marketplace, the Commission now issues the following enforcement guidance

based on its enforcement history.

34 This guidance covers three areas commonly addressed by the 

Commission in its negative option cases: disclosures, consent, and cancellation. These 

principles convey the Commission’s current views on the application of relevant statutes and 

regulations to negative option marketing and, as such, should help marketers in their compliance 

efforts and better understand how the Commission enforces the law. 

Disclosures: ROSCA35 requires marketers to clearly and conspicuously disclose the 

material terms of the transaction.

36 Pursuant to longstanding precedent, any express claim or

 32 15 U.S.C. §§ 1693-1693r.

33 39 U.S.C. § 3009.

34 In an October 2, 2019 Notice (84 Fed. Reg. 52393), the Commission sought comment on the 

need for amendments to the “Rule Concerning the Use of Prenotification Negative Option Plans” 

(i.e., “Negative Option Rule” (16 CFR Part 425)) to help consumers avoid recurring payments 

for products and services they did not intend to order and to allow them to cancel such payments 

without unwarranted obstacles. The Commission will continue to closely monitor compliance 

with the rules and laws applicable to negative option marketing, and is still considering various 

options in the rule review proceeding for the Negative Option Rule.

35 Any reference to ROSCA in these principles applies only to Internet transactions, consistent 

with that statute’s coverage. 

36 Of course, sellers fail to disclose adequately material terms if the disclosed terms are not 

truthful and substantiated. 
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deliberately implied claim is presumed to be material.

37 Moreover, the FTC’s cases for failure to 

disclose under Section 5 of the FTC Act are generally consistent with ROSCA.

38 Those terms at 

minimum should include: 

• Any material terms related to the underlying product or service that are necessary 

to prevent deception, regardless of whether that term directly relates to the terms 

of the negative option offer;

39

• That consumers will be charged40 for the good or service, or that those charges 

will increase after any applicable trial period ends, and, if applicable, that the 

charges will be on a recurring basis, unless the consumer timely takes steps to 

prevent or stop such charges;

• Each deadline (by date or frequency) by which the consumer must act in order to 

stop the charges;

• The amount (or range of costs) the consumer will be charged or billed and, if 

applicable, the frequency of such charges a consumer will incur unless the 

consumer takes timely steps to prevent or stop those charges; 

 37 See, e.g., FTC Statement on Deception, 103 F.T.C. 174, 182 (1984) (appended to Cliffdale 

Assocs., Inc., 103 F.T.C. 110 (1984)); Thompson Medical Co., 104 F.T.C. 648, 816 (1984). 38 The Commission has consistently brought cases for deceptive and pure omissions of material 

fact. See, e.g., FTC v. Roca Labs, Inc., 345 F. Supp. 3d 1375, 1390 (M.D. Fla. 2018); FTC v. 

NPB Advert., Inc., 218 F. Supp. 3d 1352, 1361 (M.D. Fla. 2016); FTC v. Am. Standard Credit 

Sys., Inc., 874 F. Supp. 1080, 1088 (C.D. Cal. 1994); FTC v. BlueHippo Funding, LLC, 762 F.3d 

238, 241 (2d Cir. 2014). But see, In re International Harvester, 104 F.T.C. 949, 1059 (1984)

(Not all omissions are deceptive or unfair. “The number of facts that may be material to 

consumers-and on which they may have prior misconceptions-is literally infinite.”)

39 The Commission recently alleged that a negative option seller’s failure to disclose that it was 

impeding access to its movie subscription service violates ROSCA. MoviePass, Inc. 40 “Charge,” “Charged,” or “Charging,” for the purposes of this Policy Statement, means any 

attempt to collect money or other consideration from a consumer, including but not limited to 

causing Billing Information to be submitted for payment, including against the consumer’s credit 

card, debit card, bank account, telephone bill, or other account.
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• The date (or dates) each charge will be submitted for payment; and

• All information necessary to cancel the contract. 

These disclosures must be clear and conspicuous.41 To meet this standard, offers should be

difficult to miss (i.e., easily noticeable) or unavoidable and easily understandable by ordinary 

consumers, including: 

• In any communication that is solely visual or solely audible, the disclosure should

be made through the same means through which the communication is presented. 

In any communication made through both visual and audible means, such as a 

television advertisement, the disclosure should be presented simultaneously in 

both the visual and audible portions of the communication even if the 

representation requiring the disclosure is made in only one means.

• A visual disclosure, by its size, contrast, location, the length of time it appears, 

and other characteristics, should stand out from any accompanying text or other 

visual elements so that it is easily noticed, read, and understood. 

• An audible disclosure, including by telephone or streaming video, should be 

delivered in a volume, speed, and cadence sufficient for ordinary consumers to 

easily hear and understand it.

• In any communication using an interactive electronic medium, such as the 

Internet or software, the disclosure should be unavoidable. A disclosure is not 

clear and conspicuous if a consumer needs to take any action, such as clicking on 

a hyperlink or hovering over an icon, to see it.

 41 Supra at nn. 9 and 15.
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• The disclosure should use diction and syntax understandable to ordinary 

consumers and should appear in each language in which the representation that 

requires the disclosure appears.

• The disclosure should comply with these requirements in each medium through 

which it is received, including all electronic devices and face-to face 

communications.

• The disclosure should not be contradicted or mitigated by, or inconsistent with, 

anything else in the communication.42

• When the representation or sales practice targets a specific audience, such as 

children, the elderly, or the terminally ill, “ordinary consumers” includes 

reasonable members of that group.

Additionally, if the disclosures are in writing (including on the Internet), they should: 

• if related to the negative option feature, appear immediately adjacent to the means 

of recording the consumer’s consent for the negative option feature; 

• if not related to the negative option feature, appear before consumers make a 

decision to buy (e.g., before they “add to shopping cart”); and 

• not contain any other information that interferes with, detracts from, contradicts, 

or otherwise undermines the ability of consumers to read and understand the 

 42 An example of an inadequate disclosure is one where the consumer sees an offer upfront, in an 

electronic or written advertisement or on the landing page of a website, which is materially 

different from the terms of the offer presented in later stages, such as later web pages, of the 

ordering process. See, e.g., FTC v. E.M.A. Nationwide, Inc., 767 F.3d 611, 633 (6th Cir. 2014); 

FTC v. Fed. Loan Modification Law Ctr., LLP, No. SA-CV-09-401-CJC (MLGx) (C.D. Cal. 

2010); FTC v. Grant Connect, LLC, 827 F. Supp. 2d 1199, 1214 (D. Nev. 2011).
13

disclosures, including any information not directly related to the material terms 

and conditions of any negative option feature. 

For all telephone and other oral offers, the disclosures should not contain any other 

information that interferes with, detracts from, contradicts, or otherwise undermines the ability of 

consumers to understand the disclosures, including any information not directly related to the 

material terms and conditions of any negative option feature. 

Consent:

43 ROSCA, judicial decisions applying Section 5, and cases brought by the 

Commission under those laws make clear marketers should obtain the consumer’s express 

informed consent before charging the consumer.44 To attain express informed consent, the 

negative option seller should: 

• obtain the consumer’s acceptance of the negative option feature offer separately 

from any other portion of the entire transaction;

• not include any information that interferes with, detracts from, contradicts, or 

otherwise undermines the ability of consumers to provide their express informed 

consent to the negative option feature;45

• obtain the consumer’s unambiguously affirmative consent to the negative option 

feature;46

 43 Negative option sellers covered by the Telemarketing Sales Rule should also ensure that they 

are complying with the consent requirements in 16 C.F.R. § 310.4 specifically applicable to 

transactions involving a free-to-pay conversion and preacquired account information. 44 Supra at nn. 11 and 16. 45 Such information could appear on the product page itself (e.g., extraneous language that 

interferes with the consumer’s ability to provide consent) or in another location (e.g., a separate 

webpage containing information materially contradicting the information on the consent page). 

46 A “pre-checked box” does not constitute affirmative consent. In addition, the seller should 

clearly disclose the name of the billing entity authorized by the consumer’s consent.
14

• obtain the consumer’s unambiguously affirmative consent to the entire 

transaction; and

• be able to verify the consumer’s consent. 

Cancellation: ROSCA requires negative option sellers to provide a simple, reasonable 

means for consumers to cancel their contracts.47 To meet this standard, negative option sellers 

should provide cancellation mechanisms that are at least as easy to use as the method the 

consumer used to initiate the negative option feature. For example, to ensure compliance with 

this simple cancellation mechanism requirement, negative option sellers should not subject

consumers to new offers or similar attempts to save the negative option arrangement that impose 

unreasonable delays on consumers’ cancellation efforts.48 In addition, negative option sellers

should provide their cancellation mechanisms at least through the same medium (such as website 

or mobile application) the consumer used to consent to the negative option feature. The negative 

option seller should provide, at a minimum, the simple mechanism over the same website or 

web-based application the consumer used to purchase the negative option feature. If the seller 

also provides for telephone cancellation, it should provide, at a minimum, a telephone number, 

and answer all calls to this number during normal business hours, within a short time frame, and 

ensure the calls are not lengthier or otherwise more burdensome than the telephone call the 

consumer used to consent to the negative option feature. 

Finally, to comply with Section 5, a seller’s cancellation procedures for negative option 

features should be effective. Sellers should not impede the effective operation of promised 

 47 Supra at 17. 48 While a request to consider an offer or discount would not amount to an unreasonable delay, 

multiple requests for a consumer to listen to additional offers, lengthy pitches, or ignoring a 

consumer’s request to decline further offers could amount to an unreasonable delay.
15

cancellation procedures, and should honor cancellation requests that comply with such 

procedures. In implementing effective cancellation procedures, marketers should not, among 

other things: hang up on consumers who call to cancel; place them on hold for an unreasonably 

long time; provide false information about how to cancel; or misrepresent the reasons for delays 

in processing consumers’ cancellation requests.49 If ROSCA applies, sellers must comply with 

both that statute and Section 5 of the FTC Act. 

 49 See, e.g., FTC v. Universal Premium Services; FTC v. Remote Response; FTC v. Hispanexo; 

FTC v. Berkeley Premium Nutraceuticals.