Wyden tackles online free trial scams

U.S. Senator Ron Wyden
Press Release,

U.S. Senator Ron Wyden introduced legislation that would protect consumers from online free trial scams and hard-to-cancel recurring-payment programs. The bill requires companies to shift extending subscriptions and memberships from “opt-out” conditions to “opt-in.”

“I have long supported efforts to increase transparency so Oregonians and consumers across the nation are not harmed by unexpected charges from companies using deceptive marketing practices and zombie fees to goose profits,” Wyden said. “As subscription services continue to grow, Congress and the administration ought to work together to simplify renewal and unsubscribe processes in order to build trust between customers and businesses.”

Too often, companies use free trial offers and unclear terms and conditions to trap consumers into subscriptions. From 2017-2019, the Better Business Bureau received 58,400 complaints related to free trials scams. Additionally, companies often use software and interfaces that subtly trick users, called dark patterns, making it harder for consumers to end these subscriptions and stop unwanted charges. To better protect and inform consumers, the Consumer OPT-IN Act would limit the use of deceptive tactics and impose stricter notification requirements on companies. This legislation would help advance President Biden’s initiative to combat “junk fees,” meaningless charges that companies impose on consumers to pad their profits. This legislation complements the Federal Trade Commission’s (FTC) recently proposed “click to cancel” rule to make it easier for consumers to get out of unwanted subscriptions.

The Consumer OPT-IN Act will protect consumers from deceptive free trials and marketing tactics by:

1. Requiring companies to get express informed consent from consumers before converting free trials into automatically renewing contracts and charging consumers;
2. Requiring companies to notify consumers of the first automatic renewal and obtain express informed consent from consumers before automatically renewing long term contracts;
3. Requiring that companies offering contracts that automatically renew on a short-term basis get express informed consent from consumers annually;
4. Requiring companies that have knowledge that a consumer isn’t using their products or service for 6 months to get the consumer’s express informed consent to continue billing, and allowing consumers to request a refund for the remaining portion of the contract;
5. Providing consumers with refunds when violations occur;
6. Giving the FTC rulemaking authority over negative option contracts, automatic renewals, and dark patterns.

 Bill text is here.

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