What This Bill Does
This bill creates rules to protect consumers from sneaky automatic renewal charges. Companies must clearly tell people about automatic renewals, how they work and how to cancel them. The bill also requires companies to get permission from customers before charging them for renewals.
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Who It Affects
- Consumers who buy goods or services with automatic renewal features
- Companies that sell goods or services with free trials, automatic renewals or negative option features (automatically charging customers unless they say no)
- The Federal Trade Commission (the government agency that enforces consumer protection laws)
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Key Provisions
- Companies must clearly explain automatic renewal features and how to cancel in the contract (Sec. 2(a))
- Companies must notify consumers at least 7 days before an automatic renewal happens and provide multiple ways to cancel, including online options and toll-free phone numbers (Sec. 2(b)(1))
- Companies must get a customer's clear permission every year before automatically renewing a contract (Sec. 2(b)(2))
- For free trial offers, companies must notify customers at least 7 days before charging them and get clear permission before the trial ends (Sec. 2(c))
- If a company breaks these rules, the automatic renewal contract becomes invalid and the company must refund all money the customer paid (Sec. 2(d))
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What Changes
If this bill becomes law, companies can no longer automatically charge customers without getting their clear permission first. Customers will receive advance notice before renewals happen. Companies cannot use dark patterns (confusing website design meant to trick people) to get consent. If companies violate these rules, automatic renewal contracts end immediately and customers get refunds.
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Important Definitions
- **Consumer**: Any person who buys or leases goods or services
- **Dark patterns**: Website design that tricks people into making choices they don't actually want to make
- **Free-to-pay conversion**: Not fully defined in this bill (defined elsewhere in federal regulations)
- **Negative option feature**: Not fully defined in this bill (defined elsewhere in federal regulations)
- **Service contract**: A contract to repair, replace or maintain property like cars or homes, or insurance for these repairs
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Effective Date
The rules take effect 1 year after the bill becomes law (Sec. 2(g)).
II
118TH CONGRESS
1ST SESSION
S. 1091
To provide for automatic renewal protections, and for other purposes.
IN THE SENATE OF THE UNITED STATES
MARCH 30, 2023
Mr. VAN HOLLEN (for himself, Mr. BLUMENTHAL, Mr. LUJA´N, Mr. REED,
and Mr. WYDEN) introduced the following bill; which was read twice and
referred to the Committee on Commerce, Science, and Transportation
A BILL
To provide for automatic renewal protections, 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 ‘‘Consumer Online Pay-
4
ment Transparency and Integrity Act’’.
5
SEC. 2. AUTOMATIC RENEWAL PROTECTIONS.
6
(a) IN GENERAL.—A person who sells a good or serv-
7
ice to a consumer pursuant to a contract that includes
8
a free-to-pay conversion or negative option feature or any
9
other automatic renewal provision shall disclose such fea-
10
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•S 1091 IS
ture or provision and the cancellation procedure clearly
1
and conspicuously in the contract.
2
(b) AUTOMATIC RENEWAL.—A person who sells a
3
good or service to a consumer pursuant to a contract that
4
will automatically renew unless the consumer cancels the
5
contract shall—
6
(1) notify, in the same manner as the consumer
7
entered into the contract, the consumer of—
8
(A) the first automatic renewal (and of
9
each automatic renewal thereafter) not less
10
than 7 days (or a longer time period as deter-
11
mined appropriate by the Commission) before
12
the commencement of the renewal period; and
13
(B) how the consumer may cancel the con-
14
tract, which shall include—
15
(i) an online mechanism for cancella-
16
tion provided by the person; and
17
(ii) a toll-free telephone number, email
18
address, postal mail address, or other cost-
19
effective, timely, and easy-to-use mecha-
20
nism for cancellation provided by the per-
21
son;
22
(2) on an annual basis and notwithstanding the
23
consumer’s consent to the initial term (or any subse-
24
quent term), obtain the consumer’s express informed
25
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•S 1091 IS
consent to renew the contract before charging the
1
consumer for the automatic renewal; and
2
(3) notwithstanding the consumer’s consent to
3
the initial term (or any subsequent term), in the
4
event that the person has actual knowledge that the
5
consumer has not used the good or service provided
6
under the contract for a period of 6 consecutive
7
months since the consumer’s most recent express in-
8
formed consent—
9
(A) obtain the consumer’s express in-
10
formed consent to the automatic renewal before
11
charging the consumer for the automatic re-
12
newal; and
13
(B) notify the consumer that the consumer
14
has a right to terminate the contract and re-
15
ceive a prorated refund for the remaining por-
16
tion of the contract.
17
(c) FREE TRIAL.—A person who sells a good or serv-
18
ice to a consumer pursuant to a contract that includes
19
a free-to-pay conversion feature with a free trial period,
20
shall—
21
(1) notify, in the same manner as the consumer
22
entered into the contract, the consumer—
23
(A) that the consumer will be charged for
24
the good or service not less than 7 days (or a
25
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•S 1091 IS
longer time period as determined appropriate by
1
the Commission) before the expiration of the
2
free trial period; and
3
(B) of how the consumer may cancel the
4
contract, which shall include—
5
(i) an online mechanism for cancella-
6
tion provided by the person; and
7
(ii) a toll-free telephone number, email
8
address, postal mail address, or other cost-
9
effective, timely, and easy-to-use mecha-
10
nism for cancellation provided by the per-
11
son; and
12
(2) notwithstanding the consumer’s consent to
13
the free trial, obtain the consumer’s express in-
14
formed consent to the applicable charge for the good
15
or service not less than 7 days (or a longer time pe-
16
riod as determined appropriate by the Commission)
17
before the expiration of the free trial period and be-
18
fore charging the consumer for the automatic re-
19
newal.
20
(d) AUTOMATIC RENEWAL VOID.—In the case of a
21
violation of subsection (a), (b), or (c)—
22
(1) the applicable automatic renewal provision
23
shall be void, and the contract shall terminate upon
24
the occurrence of such violation; and
25
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•S 1091 IS
(2) the person who violated subsection (a), (b),
1
or (c) shall provide the consumer with a refund for
2
all amounts paid by the consumer due to such viola-
3
tion.
4
(e) DARK PATTERNS.—With respect to a contract
5
that includes a free-to-pay conversion or negative option
6
feature or any other automatic renewal provision, a con-
7
sumer’s consent obtained through the use of dark patterns
8
shall not be considered express informed consent.
9
(f) EXEMPTIONS.—The requirements under sub-
10
sections (a), (b), (c), and (d) shall not apply to a service
11
contract or any other person or contract determined ap-
12
propriate by the Commission.
13
(g) EFFECTIVE DATE.—The requirements under this
14
section shall take effect on the date that is 1 year after
15
the date of enactment of this Act.
16
SEC. 3. ENFORCEMENT BY THE COMMISSION.
17
(a) UNFAIR OR DECEPTIVE ACTS OR PRACTICES.—
18
A violation of section 2 or a rule promulgated under this
19
Act shall be treated as a violation of a rule defining an
20
unfair or a deceptive act or practice under section
21
18(a)(1)(B) of the Federal Trade Commission Act (15
22
U.S.C. 57a(a)(1)(B)).
23
(b) POWERS OF THE COMMISSION.—
24
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•S 1091 IS
(1) IN GENERAL.—The Commission shall en-
1
force this Act in the same manner, by the same
2
means, and with the same jurisdiction, powers, and
3
duties as though all applicable terms and provisions
4
of the Federal Trade Commission Act (15 U.S.C. 41
5
et seq.) were incorporated into and made a part of
6
this Act.
7
(2) PRIVILEGES AND IMMUNITIES.—Any person
8
who violates section 2 or a rule promulgated under
9
this Act shall be subject to the penalties and entitled
10
to the privileges and immunities provided in the
11
Federal Trade Commission Act (15 U.S.C. 41 et
12
seq.).
13
(3) AUTHORITY PRESERVED.—Nothing in this
14
Act shall be construed to limit the authority of the
15
Commission under any other provision of law.
16
(4) RULEMAKING.—The Commission shall pro-
17
mulgate in accordance with section 553 of title 5,
18
United States Code, such rules as may be necessary
19
to carry out this Act, or to prevent unfair or decep-
20
tive acts or practices regarding free trials, automatic
21
renewals, or other contracts under which a con-
22
sumer’s silence or failure to take an affirmative ac-
23
tion to reject goods or services or to cancel an agree-
24
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•S 1091 IS
ment is interpreted by the seller as acceptance of the
1
offer.
2
SEC. 4. DEFINITIONS.
3
In this Act:
4
(1) COMMISSION.—The term ‘‘Commission’’
5
means the Federal Trade Commission.
6
(2) CONSUMER.—The term ‘‘consumer’’ means
7
any person who seeks or acquires, by purchase or
8
lease, any goods or services.
9
(3) DARK
PATTERNS.—The term ‘‘dark pat-
10
terns’’ means a user interface that has the substan-
11
tial effect of subverting or impairing user autonomy,
12
decision making, or choice.
13
(4) FREE-TO-PAY
CONVERSION.—The term
14
‘‘free-to-pay conversion’’ has the meaning given that
15
term in section 310.2 of title 16, Code of Federal
16
Regulations.
17
(5) NEGATIVE
OPTION
FEATURE.—The term
18
‘‘negative option feature’’ has the meaning given
19
that term in section 310.2 of title 16, Code of Fed-
20
eral Regulations.
21
(6) SERVICE
CONTRACT.—The term ‘‘service
22
contract’’ means a contract or agreement for a sepa-
23
rately stated consideration for any duration—
24
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•S 1091 IS
(A) to perform the repair, replacement, or
1
maintenance of property or indemnification for
2
service repair, replacement, or maintenance for
3
the operational or structural failure of any
4
motor vehicle or residential or other property
5
due to a defect in materials, workmanship, acci-
6
dental damage from handling, or normal wear
7
and tear; or
8
(B) to indemnify for the same, including
9
towing, rental, or emergency road service or
10
road hazard protection, and which may provide
11
for the service repair, replacement, or mainte-
12
nance of property for damage resulting from
13
power surges or interruption.
14
Æ
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