Unsubscribe Act of 2021

Bill: 117-hr-3953
Sponsor: full_name: Rep. Takano, Mark [D-CA-41]
Introduced: 2021-06-16
Policy area: Commerce
Subjects: Bank accounts, deposits, capital

Civil actions and liability

Consumer affairs

Consumer credit

Contracts and agency

Internet and video services

Internet, web applications, social media

State and local government operations
Latest action: action_date: 2021-06-17
text: Referred to the Subcommittee on Consumer Protection and Commerce.

Summaries:
action_date: 2021-06-16
action_desc: Introduced in House
text: <p><b>Unsubscribe Act of 20</b><strong>21</strong><br> <br> 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.</p> <p>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. <br> <br> 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.</p> <p>The bill provides for enforcement of these requirements by the Federal Trade Commission and state attorneys general.</p>

tv_txt: I 117th CONGRESS 1st Session H. R. 3953 IN THE HOUSE OF REPRESENTATIVES June 16, 2021 Mr. Takano (for himself, Mr. McGovern , Mr. Case , Mr. San Nicolas , Ms. Norton , Ms. Jackson Lee , Mr. Raskin , and Mrs. Dingell ) introduced the following bill; which was referred to the Committee on Energy and Commerce A BILL To increase consumer protection with respect to negative option agreements entered in all media, including on and off the internet, and for other purposes.

1. Short title This Act may be cited as the Unsubscribe Act of 2021 . 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. 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. 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. 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. 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.