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Hirono, Colleagues Introduce Bill to Safeguard Consumers from Online Subscription Traps, Require Companies to Shift from Opt-Out Requirements to Opt-In

WASHINGTON, D.C. – U.S. Senator Mazie K. Hirono (D-HI) joined Senator Chris Van Hollen (D-MD), U.S. Representative Yvette Clarke (D-NY), and 11 colleagues in reintroducing the Consumer Online Payment Transparency and Integrity (Consumer OPT-IN) Act, bicameral legislation to protect consumers from online free trial scams and hard-to-cancel recurring-payment programs. The lawmakers’ bill puts the onus on companies rather than consumers when it comes to subscriptions and memberships, including requiring a shift from “opt-out” conditions to “opt-in.”

This reintroduction comes after the U.S. Court of Appeals for the Eight Circuit last week vacated the Federal Trade Commission’s (FTC) 2023 “click to cancel” rule, which would have taken effect today and complemented this legislation by making it easier to get out of unwanted subscriptions. As a result of this ruling, businesses are free to continue using deceitful practices that trap consumers into making recurring payments that they never intended to make – underscoring the need to codify into law the “opt-in” requirements in this legislation.

“For too long, corporations have forced consumers to work through complicated hurdles in order to cancel their unwanted subscriptions and memberships,” said Senator Hirono. “The Consumer OPT-IN Act would address this problem by prioritizing consumer choice – offering people simple options to unsubscribe and protecting consumers from deceptive practices. I’m glad to join my colleagues in introducing this legislation to hold these corporations accountable and help people keep their hard-earned money.”

Companies increasingly use free trial offers and unclear terms and conditions to trap consumers into subscriptions. 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. While the FTC has dedicated significant resources to combatting the worst of these business practices, resulting in at least $110 million worth of refunds returned to consumers over the past five years, more action is needed. To more effectively deter companies from employing these practices and better protect and inform consumers, the Consumer OPT-IN Act would limit the use of deceptive tactics and impose stricter notification requirements on companies.

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

  • Requiring companies to get express informed consent from consumers before converting free trials into automatically renewing contracts and charging consumers;
  • Requiring companies to notify consumers of the first automatic renewal and obtain express informed consent from consumers before automatically renewing long term contracts;
  • Requiring that companies offering contracts that automatically renew on a short-term basis get express informed consent from consumers annually;
  • 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;
  • Providing consumers with refunds when violations occur; and
  • Giving the FTC rulemaking authority over negative option contracts, automatic renewals, and dark patterns.

In addition to Senators Hirono and Van Hollen, this legislation is cosponsored by Senators Richard Blumenthal (D-CT), John Fetterman (D-PA), Kirsten Gillibrand (D-NY), Ben Ray Luján (D-NM), Jeff Merkley (D-OR), Jack Reed (D-RI), Bernie Sanders (I-VT), Peter Welch (D-VT), and Ron Wyden (D-OR). In addition to Representative Clarke, this legislation is cosponsored by Representatives Robin Kelly (D-IL) and Doris Matsui (D-CA) in the House.

This legislation is endorsed by Public Citizen, National Consumer Law Center, Consumer Action, Americans for Financial Reform, and American Economic Liberties Project.

The full text of the legislation is available here.

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