made an online purchase or an online travel reserva-
tion. 
(2) Consumer confidence is essential to the 
growth of online commerce. To continue its develop-
ment as a marketplace, the Internet must provide 
consumers with clear, accurate information and give 
sellers an opportunity to fairly compete with one an-
other 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 Inter-
net and thereby harmed the American economy. 
(4) The Committee showed that, in exchange 
for ‘‘bounties’’ and other payments, hundreds of rep-
utable online retailers and Web sites 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, mis-
leading sales tactics to charge millions of American 
consumers for membership clubs the consumers did 
not want. 
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(5) Third party sellers offered membership 
clubs to consumers as they were in the process of 
completing their initial transactions on hundreds of 
Web sites. These third party ‘‘post-transaction’’ of-
fers were designed to make consumers think the of-
fers were part of the initial purchase, rather than a 
new transaction with a new seller. 
(6) Third party sellers charged millions of con-
sumers for membership clubs without ever obtaining 
consumers’ billing information, including their credit 
or debit card information, directly from the con-
sumers. Because third party sellers acquired con-
sumers’ billing information from the initial merchant 
through ‘‘data pass’’, millions of consumers were un-
aware 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 advan-
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tage of consumers’ expectations that they would 
have an opportunity to accept or reject the member-
ship club offer at the end of the trial period. 
SEC. 3. PROHIBITIONS AGAINST CERTAIN UNFAIR AND DE-
CEPTIVE 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 con-
sumer’s credit card, debit card, bank account, or other fi-
nancial account for any good or service sold in a trans-
action effected on the Internet, unless— 
(1) before obtaining the consumer’s billing in-
formation, 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 mer-
chant, 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 
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(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 ac-
count 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 FACILI-
TATE CERTAIN DECEPTIVE INTERNET SALES TRANS-
ACTIONS.—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 infor-
mation 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. 
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(c) LIMITATIONS
ON USE
OF NEGATIVE OPTION 
FEATURE IN INTERNET-BASED SALES TRANSACTIONS.— 
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, unless— 
(1) before obtaining the consumer’s initial 
agreement to participate, the seller has clearly and 
conspicuously disclosed all material terms of the 
transaction, including— 
(A) the name of the entity offering the 
goods or services; 
(B) a description of the goods or services 
being offered; 
(C) the cost of such goods or services; 
(D) notice of when billing will begin and at 
what intervals the charges will occur; 
(E) the length of any trial period; 
(F) a statement that the consumer’s ac-
count will be charged unless the consumer takes 
affirmative action and the steps the consumer 
must take to the avoid the charge; and 
(G) instructions for stopping the recurring 
charges in accordance with the requirements of 
paragraph (3); 
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