Unsubscribe Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 2683 To increase consumer protection with respect to negative option agreements entered into on the Internet, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MAY 10, 2019 Mr. TAKANO 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 into 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 2019’’. 5 SEC. 2. INCREASED CONSUMER PROTECTION WITH RE- 6 SPECT TO NEGATIVE OPTION AGREEMENTS 7 ENTERED INTO ON THE INTERNET. 8 (a) CANCELLATION OF NEGATIVE OPTION AGREE- 9 MENTS.—No person may enter into a negative option 10 VerDate Sep 11 2014 20:14 May 25, 2019 Jkt 034408 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2683.IH H2683 pbinns on DSK79D2C42PROD with BILLS 2 •HR 2683 IH agreement on the Internet with any consumer, unless the 1 negative option agreement provides the consumer with a 2 mechanism to cancel the agreement in the same manner, 3 and by the same means, into which the agreement was 4 entered. 5 (b) REQUIREMENTS FOR FREE-TO-PAY CONVERSION 6 CONTRACTS.— 7 (1) IN GENERAL.—It shall be unlawful for any 8 person to charge or attempt to charge any con- 9 sumer’s credit card, debit card, bank account, or 10 other financial account for any good or service sold 11 in a free-to-pay conversion contract entered into on 12 the Internet, unless— 13 (A) before obtaining the consumer’s billing 14 information, the person has obtained the con- 15 sumer’s express informed consent to enter into 16 the contract and has provided the consumer 17 with a notification of the terms of the contract, 18 including the fact that— 19 (i) for an introductory period, the con- 20 sumer will receive the good or service at no 21 charge or for a nominal charge; and 22 (ii) after the introductory period, the 23 consumer will be charged or charged an in- 24 VerDate Sep 11 2014 20:14 May 25, 2019 Jkt 034408 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2683.IH H2683 pbinns on DSK79D2C42PROD with BILLS 3 •HR 2683 IH creased amount for the good or service; 1 and 2 (B) before the initial charge or initial in- 3 crease after the introductory period, the person 4 requires the consumer to perform an additional 5 affirmative action, such as clicking on a con- 6 firmation button or checking a box, which indi- 7 cates the consumer’s consent to be charged the 8 amount disclosed. 9 (2) MANDATORY NOTIFICATIONS.—After the in- 10 troductory period in a free-to-pay conversion con- 11 tract entered into on the Internet between any per- 12 son and any consumer, and on a quarterly basis 13 while the contract remains in effect, the person shall 14 provide the consumer with a copy of the notification 15 of the terms of the contract. 16 (c) MANDATORY NOTIFICATIONS WITH RESPECT TO 17 OTHER NEGATIVE OPTION AGREEMENTS.— 18 (1) AUTOMATIC RENEWAL CONTRACTS.—With 19 respect to an automatic renewal contract entered 20 into on the Internet between any person and any 21 consumer— 22 (A) not later than 30 days before the end 23 of the initial fixed period in the contract, the 24 VerDate Sep 11 2014 20:14 May 25, 2019 Jkt 034408 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2683.IH H2683 pbinns on DSK79D2C42PROD with BILLS 4 •HR 2683 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 on 9 the Internet between any person and any consumer, 10 the person shall provide the consumer with a copy 11 of the notification of the terms of the contract on a 12 quarterly 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 entered into on the 17 Internet between any person and a consumer, the person 18 shall provide the consumer with a notification of the terms 19 of the agreement as changed before the change takes ef- 20 fect. 21 (e) REGULATIONS.—The Federal Trade Commission 22 may prescribe regulations under section 553 of title 5, 23 United States Code, to carry out this Act. 24 VerDate Sep 11 2014 20:14 May 25, 2019 Jkt 034408 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2683.IH H2683 pbinns on DSK79D2C42PROD with BILLS 5 •HR 2683 IH SEC. 3. ENFORCEMENT. 1 (a) BY FEDERAL TRADE COMMISSION.— 2 (1) IN GENERAL.—A violation of this Act or 3 any regulation prescribed under this Act shall be 4 treated as a violation of a rule issued under section 5 18(a)(1)(B) of the Federal Trade Commission Act 6 (15 U.S.C. 57a(a)(1)(B)) regarding unfair or decep- 7 tive acts or practices. The Federal Trade Commis- 8 sion shall enforce this Act in the same manner, by 9 the same means, and with the same jurisdiction, 10 powers, and duties as though all applicable terms 11 and provisions of the Federal Trade Commission Act 12 (15 U.S.C. 41 et seq.) were incorporated into and 13 made a part of this Act. 14 (2) PENALTIES.—Any person who violates this 15 Act or any regulation prescribed under this Act shall 16 be subject to the penalties and entitled to the privi- 17 leges and immunities provided in the Federal Trade 18 Commission Act as though all applicable terms and 19 provisions of the Federal Trade Commission Act 20 were incorporated in and made part of this Act. 21 (b) BY STATE ATTORNEYS GENERAL.— 22 (1) IN GENERAL.—Except as provided in para- 23 graph (5), the attorney general of a State or other 24 authorized State officer alleging a violation of this 25 Act or any regulation prescribed under this Act that 26 VerDate Sep 11 2014 20:14 May 25, 2019 Jkt 034408 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2683.IH H2683 pbinns on DSK79D2C42PROD with BILLS 6 •HR 2683 IH affects or may affect the State or the residents of 1 the State may bring an action on behalf of the resi- 2 dents of the State in any United States district 3 court for the district in which the defendant is 4 found, resides, or transacts business, or wherever 5 venue is proper under section 1391 of title 28, 6 United States Code, to obtain appropriate injunctive 7 relief. 8 (2) NOTICE TO COMMISSION REQUIRED.—A 9 State shall provide prior written notice to the Fed- 10 eral Trade Commission of any civil action brought 11 under paragraph (1) with a copy of the complaint 12 for the civil action, except that if providing such 13 prior notice is not feasible for the State, the State 14 shall provide notice immediately upon instituting the 15 civil action. 16 (3) INTERVENTION BY THE COMMISSION.—The 17 Federal Trade Commission may intervene in a civil 18 action brought under paragraph (1) and upon inter- 19 vening— 20 (A) may be heard on all matters arising in 21 the civil action; and 22 (B) may file petitions for appeal of a deci- 23 sion in the civil action. 24 VerDate Sep 11 2014 20:14 May 25, 2019 Jkt 034408 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2683.IH H2683 pbinns on DSK79D2C42PROD with BILLS 7 •HR 2683 IH (4) CONSTRUCTION.—Nothing in this sub- 1 section shall be construed— 2 (A) to prevent the attorney general of a 3 State or other authorized State officer from ex- 4 ercising the powers conferred on the attorney 5 general or other authorized State officer by the 6 laws of the State; or 7 (B) to prohibit the attorney general of a 8 State or other authorized State officer from 9 proceeding in State or Federal court on the 10 basis of an alleged violation of any civil or 11 criminal statute of that State. 12 (5) LIMITATION.—An action may not be 13 brought under this subsection if, at the time the ac- 14 tion is brought, the same alleged violation is the sub- 15 ject of a pending action by the Federal Trade Com- 16 mission or the United States. 17 SEC. 4. DEFINITIONS. 18 In this Act: 19 (1) AUTOMATIC RENEWAL CONTRACT.—The 20 term ‘‘automatic renewal contract’’ means a contract 21 between any person and any consumer for a good or 22 service that is automatically renewed after an initial 23 fixed period, unless the consumer instructs other- 24 wise. 25 VerDate Sep 11 2014 20:14 May 25, 2019 Jkt 034408 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2683.IH H2683 pbinns on DSK79D2C42PROD with BILLS 8 •HR 2683 IH (2) CONTINUITY PLAN CONTRACT.—The term 1 ‘‘continuity plan contract’’ means a contract between 2 any person and any consumer under which the con- 3 sumer agrees to incur charges in exchange for peri- 4 odic shipments of goods or the provision of services, 5 unless the consumer instructs otherwise. 6 (3) FREE-TO-PAY CONVERSION CONTRACT.— 7 The term ‘‘free-to-pay conversion contract’’ means a 8 contract between any person and any consumer 9 under which— 10 (A) for an introductory period, the con- 11 sumer receives a good or service at no charge 12 or for a nominal charge; and 13 (B) after the introductory period, the con- 14 sumer is charged or charged an increased 15 amount for the good or service. 16 (4) NEGATIVE OPTION AGREEMENT.—The term 17 ‘‘negative option agreement’’ means— 18 (A) an automatic renewal contract; 19 (B) a continuity plan contract; 20 (C) a free-to-pay conversion contract; 21 (D) a pre-notification negative option plan 22 contract; or 23 (E) any combination of the contracts de- 24 scribed in subparagraphs (A) through (D). 25 VerDate Sep 11 2014 20:14 May 25, 2019 Jkt 034408 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2683.IH H2683 pbinns on DSK79D2C42PROD with BILLS 9 •HR 2683 IH (5) NOTIFICATION.—The term ‘‘notification’’, 1 when used with respect to the terms of a contract, 2 means a written notification that clearly, conspicu- 3 ously, and concisely states all material terms of the 4 contract, including information regarding the can- 5 cellation process. 6 (6) PRE-NOTIFICATION NEGATIVE OPTION PLAN 7 CONTRACT.—The term ‘‘pre-notification negative op- 8 tion plan contract’’ means a contract between any 9 person and any consumer under which the consumer 10 receives periodic notices offering goods and, unless 11 the consumer specifically rejects the offer, the con- 12 sumer automatically receives the goods and incurs a 13 charge for such goods. 14 SEC. 5. EFFECTIVE DATE. 15 This Act shall apply with respect to contracts entered 16 into after the date that is 1 year after the date of the 17 enactment of this Act. 18 Æ VerDate Sep 11 2014 20:14 May 25, 2019 Jkt 034408 PO 00000 Frm 00009 Fmt 6652 Sfmt 6301 E:\BILLS\H2683.IH H2683 pbinns on DSK79D2C42PROD with BILLS