Unsubscribe Act of 2021

I 117TH CONGRESS 1ST SESSION H. R. 3953 To increase consumer protection with respect to negative option agreements entered in all media, including on and off the internet, and for other purposes. 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) intro- duced 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. 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 VerDate Sep 11 2014 00:28 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3953.IH H3953 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 3953 IH SEC. 2. INCREASED CONSUMER PROTECTION WITH RE- 1 SPECT TO NEGATIVE OPTION AGREEMENTS 2 ENTERED INTO ON THE INTERNET. 3 (a) CANCELLATION OF NEGATIVE OPTION AGREE- 4 MENTS.—No person may enter into a negative option 5 agreement with any consumer, unless the negative option 6 agreement provides the consumer with a mechanism to 7 cancel the agreement in the same manner, and by the 8 same means, into which the agreement was entered. 9 (b) REQUIREMENTS FOR FREE-TO-PAY CONVERSION 10 CONTRACTS.— 11 (1) IN GENERAL.—It shall be unlawful for any 12 person to charge or attempt to charge any con- 13 sumer’s credit card, debit card, bank account, or 14 other financial account for any good or service sold 15 in a free-to-pay conversion contract, unless— 16 (A) before obtaining the consumer’s billing 17 information, the person has obtained the con- 18 sumer’s express informed consent to enter into 19 the contract and has provided the consumer 20 with a notification of the terms of the contract, 21 including the fact that— 22 (i) for an introductory period, the con- 23 sumer will receive the good or service at no 24 charge or for a nominal charge; and 25 VerDate Sep 11 2014 00:28 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3953.IH H3953 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 3953 IH (ii) after the introductory period, the 1 consumer will be charged or charged an in- 2 creased amount for the good or service; 3 and 4 (B) before the initial charge or initial in- 5 crease after the introductory period, the person 6 requires the consumer to perform an additional 7 affirmative action, such as clicking on a con- 8 firmation button or checking a box, which indi- 9 cates the consumer’s consent to be charged the 10 amount disclosed. 11 (2) MANDATORY NOTIFICATIONS.—After the in- 12 troductory period in a free-to-pay conversion con- 13 tract between any person and any consumer, and on 14 a quarterly basis while the contract remains in ef- 15 fect, the person shall provide the consumer with a 16 copy of the notification of the terms of the contract. 17 (c) MANDATORY NOTIFICATIONS WITH RESPECT TO 18 OTHER NEGATIVE OPTION AGREEMENTS.— 19 (1) AUTOMATIC RENEWAL CONTRACTS.—With 20 respect to an automatic renewal contract between 21 any person and any consumer— 22 (A) between 2 and 7 days before the end 23 of the initial fixed period in the contract, the 24 VerDate Sep 11 2014 00:28 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3953.IH H3953 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 3953 IH person shall provide the consumer with a notifi- 1 cation of the terms of the contract; and 2 (B) after the initial fixed period in the con- 3 tract, and on a quarterly basis while the con- 4 tract remains in effect, the person shall provide 5 the consumer with a copy of the notification of 6 the terms of the contract. 7 (2) CONTINUITY PLAN CONTRACTS.—With re- 8 spect to a continuity plan contract entered into be- 9 tween any person and any consumer, the person 10 shall provide the consumer with a copy of the notifi- 11 cation of the terms of the contract on a quarterly 12 basis while the contract remains in effect. 13 (d) MANDATORY NOTIFICATIONS WITH RESPECT TO 14 MATERIAL CHANGES IN TERMS OF NEGATIVE OPTION 15 AGREEMENTS.—In the case of a material change in the 16 terms of a negative option agreement between any person 17 and a consumer, the person shall provide the consumer 18 with a notification of the terms of the agreement as 19 changed before the change takes effect. 20 (e) REGULATIONS.—The Federal Trade Commission 21 may prescribe regulations under section 553 of title 5, 22 United States Code, to carry out this Act. 23 SEC. 3. ENFORCEMENT. 24 (a) BY FEDERAL TRADE COMMISSION.— 25 VerDate Sep 11 2014 00:28 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3953.IH H3953 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 3953 IH (1) IN GENERAL.—A violation of this Act or 1 any regulation prescribed under this Act shall be 2 treated as a violation of a rule issued under section 3 18(a)(1)(B) of the Federal Trade Commission Act 4 (15 U.S.C. 57a(a)(1)(B)) regarding unfair or decep- 5 tive acts or practices. The Federal Trade Commis- 6 sion shall enforce this Act in the same manner, by 7 the same means, and with the same jurisdiction, 8 powers, and duties as though all applicable terms 9 and provisions of the Federal Trade Commission Act 10 (15 U.S.C. 41 et seq.) were incorporated into and 11 made a part of this Act. 12 (2) PENALTIES.—Any person who violates this 13 Act or any regulation prescribed under this Act shall 14 be subject to the penalties and entitled to the privi- 15 leges and immunities provided in the Federal Trade 16 Commission Act as though all applicable terms and 17 provisions of the Federal Trade Commission Act 18 were incorporated in and made part of this Act. 19 (b) BY STATE ATTORNEYS GENERAL.— 20 (1) IN GENERAL.—Except as provided in para- 21 graph (5), the attorney general of a State or other 22 authorized State officer alleging a violation of this 23 Act or any regulation prescribed under this Act that 24 affects or may affect the State or the residents of 25 VerDate Sep 11 2014 00:28 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3953.IH H3953 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 3953 IH the State may bring an action on behalf of the resi- 1 dents of the State in any United States district 2 court for the district in which the defendant is 3 found, resides, or transacts business, or wherever 4 venue is proper under section 1391 of title 28, 5 United States Code, to obtain appropriate injunctive 6 relief. 7 (2) NOTICE TO COMMISSION REQUIRED.—A 8 State shall provide prior written notice to the Fed- 9 eral Trade Commission of any civil action brought 10 under paragraph (1) with a copy of the complaint 11 for the civil action, except that if providing such 12 prior notice is not feasible for the State, the State 13 shall provide notice immediately upon instituting the 14 civil action. 15 (3) INTERVENTION BY THE COMMISSION.—The 16 Federal Trade Commission may intervene in a civil 17 action brought under paragraph (1) and upon inter- 18 vening— 19 (A) may be heard on all matters arising in 20 the civil action; and 21 (B) may file petitions for appeal of a deci- 22 sion in the civil action. 23 (4) CONSTRUCTION.—Nothing in this sub- 24 section shall be construed— 25 VerDate Sep 11 2014 00:28 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3953.IH H3953 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 3953 IH (A) to prevent the attorney general of a 1 State or other authorized State officer from ex- 2 ercising the powers conferred on the attorney 3 general or other authorized State officer by the 4 laws of the State; or 5 (B) to prohibit the attorney general of a 6 State or other authorized State officer from 7 proceeding in State or Federal court on the 8 basis of an alleged violation of any civil or 9 criminal statute of that State. 10 (5) LIMITATION.—An action may not be 11 brought under this subsection if, at the time the ac- 12 tion is brought, the same alleged violation is the sub- 13 ject of a pending action by the Federal Trade Com- 14 mission or the United States. 15 SEC. 4. PREEMPTION OF DIRECTLY CONFLICTING STATE 16 LAW. 17 This Act supersedes any State law to the extent such 18 law directly conflicts with the provisions of this Act, or 19 a standard, rule, or regulation promulgated under this 20 Act, and then only to the extent of such direct conflict. 21 Any State law, rule, or regulation shall not be considered 22 in direct conflict if it affords a greater level of protection 23 to individuals protected under this Act. 24 VerDate Sep 11 2014 00:28 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3953.IH H3953 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 3953 IH SEC. 5. DEFINITIONS. 1 In this Act: 2 (1) AUTOMATIC RENEWAL CONTRACT.—The 3 term ‘‘automatic renewal contract’’ means a contract 4 between any person and any consumer for a good or 5 service that is automatically renewed after an initial 6 fixed period, unless the consumer instructs other- 7 wise. 8 (2) CONTINUITY PLAN CONTRACT.—The term 9 ‘‘continuity plan contract’’ means a contract between 10 any person and any consumer under which the con- 11 sumer agrees to incur charges in exchange for peri- 12 odic shipments of goods or the provision of services, 13 unless the consumer instructs otherwise. 14 (3) FREE-TO-PAY CONVERSION CONTRACT.— 15 The term ‘‘free-to-pay conversion contract’’ means a 16 contract between any person and any consumer 17 under which— 18 (A) for an introductory period, the con- 19 sumer receives a good or service at no charge 20 or for a nominal charge; and 21 (B) after the introductory period, the con- 22 sumer is charged or charged an increased 23 amount for the good or service. 24 (4) NEGATIVE OPTION AGREEMENT.—The term 25 ‘‘negative option agreement’’ means— 26 VerDate Sep 11 2014 00:28 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3953.IH H3953 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 3953 IH (A) an automatic renewal contract; 1 (B) a continuity plan contract; 2 (C) a free-to-pay conversion contract; 3 (D) a pre-notification negative option plan 4 contract; or 5 (E) any combination of the contracts de- 6 scribed in subparagraphs (A) through (D). 7 (5) NOTIFICATION.—The term ‘‘notification’’, 8 when used with respect to the terms of a contract, 9 means a written notification that clearly, conspicu- 10 ously, and concisely states all material terms of the 11 contract, including information regarding the can- 12 cellation process. 13 (6) PRE-NOTIFICATION NEGATIVE OPTION PLAN 14 CONTRACT.—The term ‘‘pre-notification negative op- 15 tion plan contract’’ means a contract between any 16 person and any consumer under which the consumer 17 receives periodic notices offering goods and, unless 18 the consumer specifically rejects the offer, the con- 19 sumer automatically receives the goods and incurs a 20 charge for such goods. 21 VerDate Sep 11 2014 00:28 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3953.IH H3953 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 3953 IH SEC. 6. EFFECTIVE DATE. 1 This Act shall apply with respect to contracts entered 2 into after the date that is 1 year after the date of the 3 enactment of this Act. 4 Æ VerDate Sep 11 2014 00:28 Jul 03, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\H3953.IH H3953 kjohnson on DSK79L0C42PROD with BILLS