Unsubscribe Act of 2021

II 117TH CONGRESS 1ST SESSION S. 2072 To increase consumer protection with respect to negative option offers in all media, including on the internet, and for other purposes. IN THE SENATE OF THE UNITED STATES JUNE 16, 2021 Mr. SCHATZ (for himself, Mr. THUNE, Mr. WARNOCK, and Mr. KENNEDY) in- troduced the following bill; which was read twice and referred to the Com- mittee on Commerce, Science, and Transportation A BILL 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 Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Unsubscribe Act of 4 2021’’. 5 SEC. 2. INCREASED CONSUMER PROTECTION WITH RE- 6 SPECT TO NEGATIVE OPTION AGREEMENTS. 7 (a) DISCLOSURE OF NEGATIVE OPTIONS.—It shall be 8 unlawful for any person to charge or attempt to charge 9 VerDate Sep 11 2014 16:36 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2072.IS S2072 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 2072 IS any consumer’s credit card, debit card, bank account, or 1 other financial account, or otherwise receive payment, 2 through a negative option, unless the person clearly and 3 conspicuously discloses all material terms of the trans- 4 action before obtaining the consumer’s billing information 5 or receiving payment, whichever is earlier. 6 (b) EXPRESS INFORMED CONSENT FOR NEGATIVE 7 OPTIONS.—It shall be unlawful for any person to charge 8 or attempt to charge any consumer’s credit card, debit 9 card, bank account, or other financial account, or other- 10 wise receive payment, through a negative option, unless 11 the person obtains a consumer’s express informed consent 12 before receiving payment or charging the consumer for 13 products or services, or otherwise receiving payment, 14 through such transaction. 15 (c) TERM LIMITATION FOR NEGATIVE OPTION 16 AGREEMENTS.—After the expiration of an introductory 17 period, initial fixed period, or other preliminary period, it 18 shall be unlawful for any person to automatically renew 19 or otherwise continue a negative option agreement with 20 any consumer for a period greater than 1 month, unless 21 such person, at the time of such expiration, obtains a con- 22 sumer’s express informed consent to renew or otherwise 23 continue such agreement for a period greater than 1 24 month. 25 VerDate Sep 11 2014 16:36 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2072.IS S2072 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 2072 IS (d) CANCELLATION OF NEGATIVE OPTION AGREE- 1 MENTS.—It shall be unlawful for any person to enter into 2 a negative option agreement with any consumer, unless 3 the negative option agreement provides the consumer with 4 a simple mechanism to stop any recurring payments, in- 5 cluding the ability to cancel the agreement in the same 6 manner, and by the same means, into which the agreement 7 was entered. 8 (e) REQUIREMENTS FOR FREE-TO-PAY CONVERSION 9 CONTRACTS.— 10 (1) IN GENERAL.—It shall be unlawful for any 11 person to charge or attempt to charge any con- 12 sumer’s credit card, debit card, bank account, or 13 other financial account for any good or service sold 14 in a free-to-pay conversion contract entered into, un- 15 less each of the following is met: 16 (A) Before obtaining the consumer’s billing 17 information, or otherwise receiving payment, 18 the person has obtained the consumer’s express 19 informed consent to enter into the negative op- 20 tion contract and has provided the consumer 21 with a notification of the terms of the negative 22 option contract, including, but not limited to, 23 the following: 24 VerDate Sep 11 2014 16:36 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2072.IS S2072 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 2072 IS (i) For an introductory period, the 1 consumer will receive the good or service at 2 no cost or for a nominal cost. 3 (ii) After the introductory period, the 4 amount the consumer will be charged or 5 otherwise required to pay, including any 6 cost increase. 7 (iii) The total cost (or range of costs) 8 the consumer will be charged or otherwise 9 required to pay. 10 (B) Before the initial charge, payment, or 11 initial increase after the introductory period, 12 the person informs the consumer about the up- 13 coming charge or payment and provides the 14 consumer with access to information about the 15 simple mechanisms to cancel the contract. 16 (2) MANDATORY NOTIFICATIONS.—After the in- 17 troductory period in a free-to-pay conversion con- 18 tract entered into between any person and any con- 19 sumer, and at regular intervals, as determined by 20 the Commission, but no less frequently than annu- 21 ally, while the contract remains in effect, the person 22 shall provide the consumer with a notification of the 23 terms of the contract. 24 VerDate Sep 11 2014 16:36 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2072.IS S2072 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 2072 IS (f) MANDATORY NOTIFICATIONS WITH RESPECT TO 1 OTHER NEGATIVE OPTION AGREEMENTS.— 2 (1) AUTOMATIC RENEWAL CONTRACTS.—With 3 respect to an automatic renewal contract entered 4 into between any person and any consumer— 5 (A) not later than 2 days and no more 6 than 7 days before the end of the initial fixed 7 period in the contract, the person shall provide 8 the consumer with a notification of the terms of 9 the contract; and 10 (B) after the initial fixed period in the con- 11 tract, and at regular intervals, as determined by 12 the Commission, but no less frequently than an- 13 nually, while the contract remains in effect, the 14 person shall provide the consumer with a notifi- 15 cation of the terms of the contract and access 16 to, or information about, the simple mecha- 17 nisms to cancel the contract. 18 (2) CONTINUITY PLAN CONTRACTS.—With re- 19 spect to a continuity plan contract entered into be- 20 tween any person and any consumer, the person 21 shall provide the consumer with a notification of the 22 terms of the contract and access to information 23 about the simple mechanisms to cancel the contract 24 at regular intervals, as determined by the Commis- 25 VerDate Sep 11 2014 16:36 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2072.IS S2072 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 2072 IS sion, but no less frequently than annually while the 1 contract remains in effect. 2 SEC. 3. ENFORCEMENT. 3 (a) BY THE COMMISSION.— 4 (1) IN GENERAL.—A violation of this Act shall 5 be treated as a violation of a rule issued under sec- 6 tion 18(a)(1)(B) of the Federal Trade Commission 7 Act (15 U.S.C. 57a(a)(1)(B)) regarding unfair or 8 deceptive acts or practices. The Commission shall 9 enforce this Act in the same manner, by the same 10 means, and with the same jurisdiction, powers, and 11 duties as though all applicable terms and provisions 12 of the Federal Trade Commission Act (15 U.S.C. 41 13 et seq.) were incorporated into and made a part of 14 this Act. 15 (2) PENALTIES.—Any person who violates this 16 Act shall be subject to the penalties and entitled to 17 the privileges and immunities provided in the Fed- 18 eral Trade Commission Act as though all applicable 19 terms and provisions of the Federal Trade Commis- 20 sion Act were incorporated in and made a part of 21 this Act. 22 (3) AUTHORITY PRESERVED.—Nothing in this 23 Act shall be construed to limit the authority of the 24 Commission under any other provision of law. 25 VerDate Sep 11 2014 16:36 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2072.IS S2072 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 2072 IS (b) BY STATE ATTORNEYS GENERAL.— 1 (1) IN GENERAL.—Except as provided in para- 2 graph (5), the attorney general of a State or other 3 authorized State officer alleging a violation of this 4 Act that affects or may affect the State or the resi- 5 dents of the State may bring an action on behalf of 6 the residents of the State in any United States dis- 7 trict court for the district in which the defendant is 8 found, resides, or transacts business, or wherever 9 venue is proper under section 1391 of title 28, 10 United States Code, to obtain appropriate injunctive 11 relief. 12 (2) NOTICE TO COMMISSION REQUIRED.—A 13 State shall provide prior written notice to the Com- 14 mission of any civil action brought under paragraph 15 (1) that includes a copy of the complaint for the civil 16 action, except that if providing such prior notice is 17 not feasible for the State, the State shall provide no- 18 tice immediately upon instituting the civil action. 19 (3) INTERVENTION BY THE COMMISSION.—The 20 Commission may intervene in a civil action brought 21 under paragraph (1) and upon intervening— 22 (A) may be heard on all matters arising in 23 the civil action; and 24 VerDate Sep 11 2014 16:36 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2072.IS S2072 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 2072 IS (B) may file petitions for appeal of a deci- 1 sion in the civil action. 2 (4) CONSTRUCTION.—Nothing in this sub- 3 section shall be construed— 4 (A) to prevent the attorney general of a 5 State or other authorized State officer from ex- 6 ercising the powers conferred on the attorney 7 general or other authorized State officer by the 8 laws of the State; or 9 (B) to prohibit the attorney general of a 10 State or other authorized State officer from 11 proceeding in State or Federal court on the 12 basis of an alleged violation of any civil or 13 criminal statute of that State. 14 (5) LIMITATION.—An action may not be 15 brought under this subsection if, at the time the ac- 16 tion is brought, the same alleged violation is the sub- 17 ject of a pending action by the Commission or the 18 United States. 19 SEC. 4. PREEMPTION OF DIRECTLY CONFLICTING STATE 20 LAWS. 21 This Act shall supersede any State law to the extent 22 such law directly conflicts with the provisions of this Act, 23 or a standard, rule, or regulation promulgated under this 24 Act, and then only to the extent of such direct conflict. 25 VerDate Sep 11 2014 16:36 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2072.IS S2072 pamtmann on DSKBC07HB2PROD with BILLS 9 •S 2072 IS Any State law, rule, or regulation shall not be considered 1 in direct conflict if it affords a greater level of protection 2 to individuals protected under this Act. 3 SEC. 5. DEFINITIONS. 4 In this Act: 5 (1) AUTOMATIC RENEWAL CONTRACT.—The 6 term ‘‘automatic renewal contract’’ means a contract 7 between any person and any consumer for a good or 8 service that is automatically renewed after an initial 9 fixed period, unless the consumer instructs other- 10 wise. 11 (2) COMMISSION.—The term ‘‘Commission’’ 12 means the Federal Trade Commission. 13 (3) CONTINUITY PLAN CONTRACT.—The term 14 ‘‘continuity plan contract’’ means a contract between 15 any person and any consumer under which the con- 16 sumer agrees to pay for periodic shipments of goods 17 or the provision of services, unless the consumer in- 18 structs otherwise. 19 (4) FREE-TO-PAY CONVERSION CONTRACT.— 20 The term ‘‘free-to-pay conversion contract’’ means a 21 contract between any person and any consumer 22 under which— 23 VerDate Sep 11 2014 16:36 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2072.IS S2072 pamtmann on DSKBC07HB2PROD with BILLS 10 •S 2072 IS (A) for an introductory period, the con- 1 sumer receives a good or service at no charge 2 or for a nominal charge; and 3 (B) after the introductory period, the 4 amount the consumer will be charged or other- 5 wise be required to pay is increased for the 6 good or service. 7 (5) NEGATIVE OPTION.—The term ‘‘negative 8 option’’ means— 9 (A) an offer or agreement to sell or provide 10 any goods or services, or a provision under 11 which the customer’s silence or failure to take 12 an affirmative action to reject goods or services 13 or to cancel the agreement is interpreted by the 14 seller as acceptance of the offer, including but 15 not limited to— 16 (i) an automatic renewal contract; 17 (ii) a continuity plan contract; 18 (iii) a free-to-pay conversion contract; 19 (iv) a pre-notification negative option 20 plan contract; or 21 (v) any combination of the contracts 22 described in clauses (i) through (iv). 23 (6) NOTIFICATION.—The term ‘‘notification’’, 24 when used with respect to the terms of a contract, 25 VerDate Sep 11 2014 16:36 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2072.IS S2072 pamtmann on DSKBC07HB2PROD with BILLS 11 •S 2072 IS means a written notification that clearly, conspicu- 1 ously, and concisely states all material terms of the 2 negative option, including information regarding the 3 simple mechanisms for cancellation. 4 (7) PRE-NOTIFICATION NEGATIVE OPTION PLAN 5 CONTRACT.—The term ‘‘pre-notification negative op- 6 tion plan contract’’ means a contract between any 7 person and any consumer under which the consumer 8 receives periodic notices offering goods or services 9 and, unless the consumer specifically rejects the 10 offer, the consumer automatically receives the goods 11 and services and agrees to pay for such goods and 12 services. 13 SEC. 6. EFFECTIVE DATE. 14 This Act shall apply with respect to contracts entered 15 into after the date that is 1 year after the date of the 16 enactment of this Act. 17 Æ VerDate Sep 11 2014 16:36 Jul 12, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6301 E:\BILLS\S2072.IS S2072 pamtmann on DSKBC07HB2PROD with BILLS