Unsubscribe Act of 2021
Bill: S.2072 | Sponsor: Sen. Schatz, Brian (D-HI)
Policy area: Commerce

Summary:
Unsubscribe Act of 2021  This bill requires that certain consumer protections are included in negative option agreements (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
Further, under free-to-pay conversion contracts (a type of negative option agreement where a consumer is charged a nominal introductory rate and an increased rate after the introductory period ends), before charging a consumer the provider of the good or service must obtain the consumer's informed consent, provide the terms of the contract, and provide information about how to cancel the contract.
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 offers 
    in all media, including on 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.

    (a) Disclosure of Negative Options.--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, or otherwise receive 
payment, through a negative option, unless the person clearly and 
conspicuously discloses all material terms of the transaction before 
obtaining the consumer's billing information or receiving payment, 
whichever is earlier.
    (b) Express Informed Consent for Negative Options.--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, or 
otherwise receive payment, through a negative option, unless the person 
obtains a consumer's express informed consent before receiving payment 
or charging the consumer for products or services, or otherwise 
receiving payment, through such transaction.
    (c) Term Limitation for Negative Option Agreements.--After the 
expiration of an introductory period, initial fixed period, or other 
preliminary period, it shall be unlawful for any person to 
automatically renew or otherwise continue a negative option agreement 
with any consumer for a period greater than 1 month, unless such 
person, at the time of such expiration, obtains a consumer's express 
informed consent to renew or otherwise continue such agreement for a 
period greater than 1 month.
    (d) Cancellation of Negative Option Agreements.--It shall be 
unlawful for any person to enter into a negative option agreement with 
any consumer, unless the negative option agreement provides the 
consumer with a simple mechanism to stop any recurring payments, 
including the ability to cancel the agreement in the same manner, and 
by the same means, into which the agreement was entered.
    (e) 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 entered into, 
        unless each of the following is met:
                    (A) Before obtaining the consumer's billing 
                information, or otherwise receiving payment, the person 
                has obtained the consumer's express informed consent to 
                enter into the negative option contract and has 
                provided the consumer with a notification of the terms 
                of the negative option contract, including, but not 
                limited to, the following:
                            (i) For an introductory period, the 
                        consumer will receive the good or service at no 
                        cost or for a nominal cost.
                            (ii) After the introductory period, the 
                        amount the consumer will be charged or 
                        otherwise required to pay, including any cost 
                        increase.
                            (iii) The total cost (or range of costs) 
                        the consumer will be charged or otherwise 
                        required to pay.
                    (B) Before the initial charge, payment, or initial 
                increase after the introductory period, the person 
                informs the consumer about the upcoming charge or 
                payment and provides the consumer with access to 
                information about the simple mechanisms to cancel the 
                contract.
            (2) Mandatory notifications.--After the introductory period 
        in a free-to-pay conversion contract entered into between any 
        person and any consumer, and at regular intervals, as 
        determined by the Commission, but no less frequently than 
        annually, while the contract remains in effect, the person 
        shall provide the consumer with a notification of the terms of 
        the contract.
    (f) Mandatory Notifications With Respect to Other Negative Option 
Agreements.--
            (1) Automatic renewal contracts.--With respect to an 
        automatic renewal contract entered into between any person and 
        any consumer--
                    (A) not later than 2 days and no more than 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 at regular intervals, as determined by the 
                Commission, but no less frequently than annually, while 
                the contract remains in effect, the person shall 
                provide the consumer with a notification of the terms 
                of the contract and access to, or information about, 
                the simple mechanisms to cancel 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 
        notification of the terms of the contract and access to 
        information about the simple mechanisms to cancel the contract 
        at regular intervals, as determined by the Commission, but no 
        less frequently than annually while the contract remains in 
        effect.

SEC. 3. ENFORCEMENT.

    (a) By the Commission.--
            (1) In general.--A violation of 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 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 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 a part of this 
        Act.
            (3) Authority preserved.--Nothing in this Act shall be 
        construed to limit the authority of the Commission under any 
        other provision of law.
    (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 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 Commission of any civil action 
        brought under paragraph (1) that includes 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 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 
        Commission or the United States.

SEC. 4. PREEMPTION OF DIRECTLY CONFLICTING STATE LAWS.

    This Act shall supersede 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) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
            (3) Continuity plan contract.--The term ``continuity plan 
        contract'' means a contract between any person and any consumer 
        under which the consumer agrees to pay for periodic shipments 
        of goods or the provision of services, unless the consumer 
        instructs otherwise.
            (4) 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 amount the 
                consumer will be charged or otherwise be required to 
                pay is increased for the good or service.
            (5) Negative option.--The term ``negative option'' means--
                    (A) an offer or agreement to sell or provide any 
                goods or services, or a provision 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, including but not limited to--
                            (i) an automatic renewal contract;
                            (ii) a continuity plan contract;
                            (iii) a free-to-pay conversion contract;
                            (iv) a pre-notification negative option 
                        plan contract; or
                            (v) any combination of the contracts 
                        described in clauses (i) through (iv).
            (6) 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 negative option, including 
        information regarding the simple mechanisms for cancellation.
            (7) 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 or services 
        and, unless the consumer specifically rejects the offer, the 
        consumer automatically receives the goods and services and 
        agrees to pay for such goods and services.

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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