II 

111TH CONGRESS 

2D SESSION S. 3386 

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

IN THE SENATE OF THE UNITED STATES 

MAY 19, 2010 

Mr. ROCKEFELLER (for himself, Mr. PRYOR, Mr. NELSON of Florida, Ms. 

KLOBUCHAR, Mrs. MCCASKILL, and Mr. LEMIEUX) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation 

A BILL 

To protect consumers from certain aggressive sales tactics 

on the Internet. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Restore Online Shop5 pers’ Confidence Act’’. 

6 SEC. 2. FINDINGS; DECLARATION OF POLICY. 

7 The Congress finds the following: 

8 (1) The Internet has become an important 

9 channel of commerce in the United States, account10 ing for billions of dollars in retail sales every year. 


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1 Over half of all American adults have now either 

2 made an online purchase or an online travel reserva3 tion. 

4 (2) Consumer confidence is essential to the 

5 growth of online commerce. To continue its develop6 ment as a marketplace, the Internet must provide 

7 consumers with clear, accurate information and give 

8 sellers an opportunity to fairly compete with one an9 other for consumers’ business. 

10 (3) An investigation by the Senate Committee 

11 on Commerce, Science, and Transportation found 

12 abundant evidence that the aggressive sales tactics 

13 many companies use against their online customers 

14 have undermined consumer confidence in the Inter15 net and thereby harmed the American economy. 

16 (4) The Committee showed that, in exchange 

17 for ‘‘bounties’’ and other payments, hundreds of rep18 utable online retailers and websites shared their cus19 tomers’ billing information, including credit card and 

20 debit card numbers, with third party sellers through 

21 a process known as ‘‘data pass’’. These third party 

22 sellers in turn used aggressive, misleading sales tac23 tics to charge millions of American consumers for 

24 membership clubs the consumers did not want. 


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1 (5) Third party sellers offered membership 

2 clubs to consumers as they were in the process of 

3 completing their initial transactions on hundreds of 

4 websites. These third party ‘‘post-transaction’’ offers 

5 were designed to make consumers think the offers 

6 were part of the initial purchase, rather than a new 

7 transaction with a new seller. 

8 (6) Third party sellers charged millions of con9 sumers for membership clubs without ever obtaining 

10 consumers’ billing information, including their credit 

11 or debit card information, directly from the con12 sumers. Because third party sellers acquired con13 sumers’ billing information from the initial merchant 

14 through ‘‘data pass’’, millions of consumers were un15 aware they had been enrolled in membership clubs. 

16 (7) The use of a ‘‘data pass’’ process defied 

17 consumers’ expectations that they could only be 

18 charged for a good or a service if they submitted 

19 their billing information, including their complete 

20 credit or debit card numbers. 

21 (8) Third party sellers used a free trial period 

22 to enroll members, after which they periodically 

23 charged consumers until consumers affirmatively 

24 canceled the memberships. This use of ‘‘free-to-pay 

25 conversion’’ and ‘‘negative option’’ sales took advanVerDate Mar 15 2010 02:34 May 20, 2010 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3386.IS S3386

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1 tage of consumers’ expectations that they would 

2 have an opportunity to accept or reject the member3 ship club offer at the end of the trial period. 

4 SEC. 3. PROHIBITIONS AGAINST CERTAIN UNFAIR AND DE5 CEPTIVE INTERNET SALES PRACTICES. 

6 (a) REQUIREMENTS FOR CERTAIN INTERNET-BASED

7 SALES.—It shall be unlawful for any post-transaction 

8 third party seller to charge or attempt to charge any con9 sumer’s credit card, debit card, bank account, or other fi10 nancial account for any good or service sold in a trans11 action effected on the Internet, unless— 

12 (1) before obtaining the purchaser’s billing in13 formation, the post-transaction third party seller has 

14 clearly and conspicuously disclosed to the purchaser 

15 all material terms of the transaction, including— 

16 (A) a description of the goods or services 

17 being offered; 

18 (B) the fact that the post-transaction third 

19 party seller is not affiliated with the initial mer20 chant, which may include disclosure of the 

21 name of the post-transaction third party in a 

22 manner that clearly differentiates the post23 transaction third party seller from the initial 

24 merchant; and 

25 (C) the cost of such goods or services; and 


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1 (2) the post-transaction third party seller has 

2 received the express informed consent for the charge 

3 from the consumer whose credit card, debit card, 

4 bank account, or other financial account will be 

5 charged by— 

6 (A) obtaining from the consumer— 

7 (i) the full account number of the ac8 count to be charged; and 

9 (ii) the consumer’s name and address 

10 and a means to contact the consumer; and 

11 (B) an additional affirmative action from 

12 the consumer, such as clicking on a confirma13 tion button or checking a box that indicates the 

14 consumer’s consent to be charged the amount 

15 disclosed. 

16 (b) PROHIBITION ON DATA-PASS USED TO FACILI17 TATE CERTAIN DECEPTIVE INTERNET SALES TRANS18 ACTIONS.—It shall be unlawful for an initial merchant to 

19 disclose a credit card, debit card, bank account, or other 

20 financial account number, or to disclose other billing infor21 mation that is used to charge a customer of the initial 

22 merchant, to any post-transaction third party seller for 

23 use in an Internet-based sale of any goods or services from 

24 that post-transaction third party seller. 


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1 (c) LIMITATIONS ON USE OF NEGATIVE OPTION

2 FEATURE IN INTERNET-BASED SALES TRANSACTIONS.— 

3 It shall be unlawful for any person to charge or attempt 

4 to charge any consumer for any goods or services sold in 

5 a transaction effected on the Internet through a negative 

6 option feature, unless— 

7 (1) before obtaining the purchaser’s initial 

8 agreement to participate in the negative option plan, 

9 the seller has clearly and conspicuously disclosed all 

10 material terms of the transaction, including— 

11 (A) the name of the entity offering the 

12 goods or services; 

13 (B) a description of the goods or services 

14 being offered; 

15 (C) the cost of such goods or services; 

16 (D) notice of when billing will begin and at 

17 what intervals the charges will occur; and 

18 (E) the length of any trial period, includ19 ing a statement that the consumer’s account 

20 will be charged unless the consumer takes af21 firmative action and the steps the consumer 

22 must take to the avoid the charge; 

23 (2) the seller has obtained the express informed 

24 consent described in subsection (a)(2) from the pur25 chaser before charging or attempting to charge the 


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1 purchaser’s credit card, debit card, bank account, or 

2 other financial account on a recurring basis; 

3 (3) the seller enables the purchaser to stop re4 curring charges from being made to the purchaser’s 

5 credit card, debit card, bank account, or other finan6 cial account through a simple process that is avail7 able via— 

8 (A) the Internet; and 

9 (B) telephone; and 

10 (4) not less than 10 days prior to the initiation 

11 of each charge to a purchaser’s credit card, debit 

12 card, bank account, or other financial account, the 

13 seller has sent the purchaser an e-mail (at an e-mail 

14 account provided by the consumer) that clearly and 

15 conspicuously discloses— 

16 (A) that a charge will be made to the con17 sumer’s credit card, debit card, bank account, 

18 or other financial account; 

19 (B) the amount of the charge and a de20 scription of the goods and services for which the 

21 consumer will be charged; and 

22 (C) instructions for stopping recurring 

23 charges in accordance with the requirements of 

24 paragraph (3). 


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1 (d) APPLICATION WITH OTHER LAW.—Nothing in 

2 this Act shall be construed to supersede, modify, or other3 wise affect the requirements of the Electronic Funds 

4 Transfer Act (15 U.S.C. 1693 et seq.) or any regulation 

5 promulgated thereunder. 

6 (e) DEFINITIONS.—In this section: 

7 (1) INITIAL MERCHANT.—The term ‘‘initial 

8 merchant’’ means a person that has obtained a con9 sumer’s billing information directly from the con10 sumer through an Internet transaction initiated by 

11 the consumer. 

12 (2) NEGATIVE OPTION FEATURE.—The term 

13 ‘‘negative option feature’’ has the meaning given 

14 that term in section 310.2(t) of the Federal Trade 

15 Commission’s Telemarketing Sales Rule regulations 

16 (16 C.F.R. 310.2(t)). 

17 (3) POST-TRANSACTION THIRD PARTY SELL18 ER.—The term ‘‘post-transaction third party seller’’ 

19 means a person that— 

20 (A) sells, or offers for sale, any good or 

21 service on the Internet; 

22 (B) solicits the purchase of such goods or 

23 services on the Internet through an initial mer24 chant after the consumer has initiated a trans25 action with the initial merchant; and 


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1 (C) is not a subsidiary or corporate affil2 iate of the initial merchant. 

3 SEC. 4. ENFORCEMENT BY FEDERAL TRADE COMMISSION. 

4 (a) IN GENERAL.—Violation of this Act or any regu5 lation prescribed under this Act shall be treated as a viola6 tion of a rule under section 18 of the Federal Trade Com7 mission Act (15 U.S.C. 57a) regarding unfair or deceptive 

8 acts or practices. The Federal Trade Commission shall en9 force this Act in the same manner, by the same means, 

10 and with the same jurisdiction, powers, and duties as 

11 though all applicable terms and provisions of the Federal 

12 Trade Commission Act (15 U.S.C. 41 et seq.) were incor13 porated into and made a part of this Act. 

14 (b) REGULATIONS.—Notwithstanding any other pro15 vision of law, the Commission may promulgate such regu16 lations as it finds necessary or appropriate under this Act 

17 under section 553 of title 5, United States Code. 

18 (c) POWERS OF COMMISSION.— 

19 (1) IN GENERAL.—The Commission shall pre20 vent any person from violating this Act and any reg21 ulation prescribed under this Act, in the same man22 ner, by the same means, and with the same jurisdic23 tion, powers and duties as though all applicable 

24 terms and provisions of the Federal Trade CommisVerDate Mar 15 2010 02:34 May 20, 2010 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S3386.IS S3386

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1 sion Act (15 U.S.C. 41 et seq.) were incorporated 

2 into and made a part of this Act. 

3 (2) PENALTIES.—Any person who violates this 

4 Act or any regulation prescribed under this Act, 

5 shall be subject to the penalties and entitled to the 

6 privileges and immunities provided in the Federal 

7 Trade Commission Act as though all applicable 

8 terms and provisions of the Federal Trade Commis9 sion Act were incorporated in and made part of this 

10 Act. 

11 (d) AUTHORITY PRESERVED.—Nothing in this sec12 tion shall be construed to limit the authority of the Com13 mission under any other provision of law. 

14 SEC. 5. ENFORCEMENT BY STATE ATTORNEYS GENERAL. 

15 (a) RIGHT OF ACTION.—Except as provided in sub16 section (e), the attorney general of a State, or other au17 thorized State officer, alleging a violation of this Act or 

18 any regulation issued under this Act that affects or may 

19 affect such State or its residents may bring an action on 

20 behalf of the residents of the State in any United States 

21 district court for the district in which the defendant is 

22 found, resides, or transacts business, or wherever venue 

23 is proper under section 1391 of title 28, United States 

24 Code, to obtain appropriate injunctive relief. 

25 (b) INITIATION OF CIVIL ACTION.— 


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1 (1) NOTICE TO COMMISSION REQUIRED IN ALL

2 CASES.—A State shall provide prior written notice to 

3 the Federal Trade Commission of any civil action 

4 under subsection (a) together with a copy of its com5 plaint, except that if it is not feasible for the State 

6 to provide such prior notice, the State shall provide 

7 such notice immediately upon instituting such ac8 tion. 

9 (2) FILING OF COMPLAINT.—A State may ini10 tiate the civil action by filing a complaint— 

11 (A) at any time after the date on which 

12 the 30-day period ends; or 

13 (B) earlier than such date if the Commis14 sion consents to an earlier initiation of the civil 

15 action by the State. 

16 (C) FORM OF NOTICE.—The written notice 

17 required by this paragraph may be provided by 

18 electronic mail, facsimile machine, or any other 

19 means of communication accepted by the Com20 mission. 

21 (c) INTERVENTION BY THE COMMISSION.—The Com22 mission may intervene in such civil action and upon inter23 vening— 

24 (1) be heard on all matters arising in such civil 

25 action; and 


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1 (2) file petitions for appeal of a decision in such 

2 civil action. 

3 (d) CONSTRUCTION.—Nothing in this section shall be 

4 construed— 

5 (1) to prevent the attorney general of a State, 

6 or other authorized State officer, from exercising the 

7 powers conferred on the attorney general, or other 

8 authorized State officer, by the laws of such State; 

9 or 

10 (2) to prohibit the attorney general of a State, 

11 or other authorized State officer, from proceeding in 

12 State or Federal court on the basis of an alleged vio13 lation of any civil or criminal statute of that State. 

14 (e) LIMITATION.—No separate suit shall be brought 

15 under this section if, at the time the suit is brought, the 

16 same alleged violation is the subject of a pending action 

17 by the Federal Trade Commission or the United States 

18 under this Act. 

Æ 


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