FTC Proposes Massive Expansion of Negative Option Rule

| 13 min

If you’re offering any products or services involving a negative option or automatic renewal plan, pay close attention to the FTC’s announcement today of a proposed rule that would drastically alter requirements for negative option disclosures while simultaneously granting the agency authority to seek redress and civil penalties for misrepresentations unrelated to the negative option transaction itself, such as claims related to underlying products, features, and services. Among other things, the rule as proposed would require that cancellation be at least as easy to use as the method the consumer used to initiate the Negative Option Feature,” and that companies obtain consent before trying to save” a cancellation attempt and provide annual reminders for services that do not involve the physical delivery of goods.