Unsubscribe Act of 2021
Bill: H.R.3953 | Sponsor: Rep. Takano, Mark (D-CA)
Policy area: Commerce

Summary:
Unsubscribe Act of 2021  This bill requires that certain consumer protections are included in negative option agreements (i.e., an agreement under which a consumer's failure to take an affirmative action is considered approval to be charged for goods or services). These agreements are prohibited unless the terms provide the consumer with a way to cancel the agreement, in the same manner by which the agreement was entered, before incurring further or increased charges.
Further, under free-to-pay conversion contracts, where a consumer is charged a nominal introductory rate and an increased rate after the introductory period ends, the provider of the good or service must require the consumer to perform an additional action, like clicking a confirmation button, before the increased rate takes effect.   The bill also requires that certain notifications are provided to consumers in the context of other forms of negative option agreements online, such as notice between two and seven days before an automatic renewal.
The bill provides for enforcement of these requirements by the Federal Trade Commission and state attorneys general.

To increase consumer protection with respect to negative option 
agreements entered in all media, including on and off the internet, 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 ``Unsubscribe Act of 2021''.

SEC. 2. INCREASED CONSUMER PROTECTION WITH RESPECT TO NEGATIVE OPTION 
              AGREEMENTS ENTERED INTO ON THE INTERNET.

    (a) Cancellation of Negative Option Agreements.--No person may 
enter into a negative option agreement with any consumer, unless the 
negative option agreement provides the consumer with a mechanism to 
cancel the agreement in the same manner, and by the same means, into 
which the agreement was entered.
    (b) Requirements for Free-To-Pay Conversion Contracts.--
            (1) 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, unless--
                    (A) before obtaining the consumer's billing 
                information, the person has obtained the consumer's 
                express informed consent to enter into the contract and 
                has provided the consumer with a notification of the 
                terms of the contract, including the fact that--
                            (i) for an introductory period, the 
                        consumer will receive the good or service at no 
                        charge or for a nominal charge; and
                            (ii) after the introductory period, the 
                        consumer will be charged or charged an 
                        increased amount for the good or service; and
                    (B) before the initial charge or initial increase 
                after the introductory period, the person requires the 
                consumer to perform an additional affirmative action, 
                such as clicking on a confirmation button or checking a 
                box, which indicates the consumer's consent to be 
                charged the amount disclosed.
            (2) Mandatory notifications.--After the introductory period 
        in a free-to-pay conversion contract between any person and any 
        consumer, and on a quarterly basis while the contract remains 
        in effect, the person shall provide the consumer with a copy of 
        the notification of the terms of the contract.
    (c) Mandatory Notifications With Respect to Other Negative Option 
Agreements.--
            (1) Automatic renewal contracts.--With respect to an 
        automatic renewal contract between any person and any 
        consumer--
                    (A) between 2 and 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
                    (B) after the initial fixed period in the contract, 
                and on a quarterly basis while the contract remains in 
                effect, the person shall provide the consumer with a 
                copy of the notification of the terms of the contract.
            (2) 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 copy 
        of the notification of the terms of the contract on a quarterly 
        basis while the contract remains in effect.
    (d) Mandatory Notifications With Respect to Material Changes in 
Terms of Negative Option Agreements.--In the case of a material change 
in the terms of a negative option agreement between any person and a 
consumer, the person shall provide the consumer with a notification of 
the terms of the agreement as changed before the change takes effect.
    (e) Regulations.--The Federal Trade Commission may prescribe 
regulations under section 553 of title 5, United States Code, to carry 
out this Act.

SEC. 3. ENFORCEMENT.

    (a) By Federal Trade Commission.--
            (1) In general.--A violation of this Act or any regulation 
        prescribed under 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 Federal Trade 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) Penalties.--Any person who violates this Act or any 
        regulation prescribed under 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 part of this Act.
    (b) By State Attorneys General.--
            (1) 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 or any regulation prescribed 
        under 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.
            (2) Notice to commission required.--A State shall provide 
        prior written notice to the Federal Trade Commission of any 
        civil action brought under paragraph (1) with 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.
            (3) Intervention by the commission.--The Federal Trade 
        Commission may intervene in a civil action brought under 
        paragraph (1) and upon intervening--
                    (A) may be heard on all matters arising in the 
                civil action; and
                    (B) may file petitions for appeal of a decision in 
                the civil action.
            (4) Construction.--Nothing in this subsection shall be 
        construed--
                    (A) 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
                    (B) 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.
            (5) 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 
        Federal Trade Commission or the United States.

SEC. 4. PREEMPTION OF DIRECTLY CONFLICTING STATE LAW.

    This Act supersedes 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:
            (1) 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.
            (2) Continuity plan contract.--The term ``continuity plan 
        contract'' means a contract between any person and any consumer 
        under which the consumer agrees to incur charges in exchange 
        for periodic shipments of goods or the provision of services, 
        unless the consumer instructs otherwise.
            (3) Free-to-pay conversion contract.--The term ``free-to-
        pay conversion contract'' means a contract between any person 
        and any consumer under which--
                    (A) for an introductory period, the consumer 
                receives a good or service at no charge or for a 
                nominal charge; and
                    (B) after the introductory period, the consumer is 
                charged or charged an increased amount for the good or 
                service.
            (4) Negative option agreement.--The term ``negative option 
        agreement'' means--
                    (A) an automatic renewal contract;
                    (B) a continuity plan contract;
                    (C) a free-to-pay conversion contract;
                    (D) a pre-notification negative option plan 
                contract; or
                    (E) any combination of the contracts described in 
                subparagraphs (A) through (D).
            (5) 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 contract, including information 
        regarding the cancellation process.
            (6) 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 and, unless 
        the consumer specifically rejects the offer, the consumer 
        automatically receives the goods and incurs a charge for such 
        goods.

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.
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