FTC Announced they Will Keep Negative Option Rule In Its Current Form (July 25, 2014)

FTC Announced They Will Keep Negative Option Rule In Its Current Form

July 25, 2014

The Federal Trade Commission (“FTC”) announced that they have decided to maintain the existing framework of its Negative Option Rule following a thorough review. This rule, known as the "Trade Regulation Rule Concerning Use of Prenotification Negative Option Plans," mandates that sellers must provide clear disclosures about the terms of any negative option plans before consumers subscribe. In these plans, a customer's lack of response is interpreted as acceptance of the offer, allowing sellers to ship merchandise automatically.

In 2009, the FTC sought public comments to evaluate the effectiveness of the rule. While some feedback raised concerns about negative option marketing practices that extend beyond the prenotification plans addressed by the rule, the FTC noted that other regulations, like the Restore Online Shoppers’ Confidence Act and proposed changes to the Telemarketing Sales Rule, would likely mitigate many of these issues. As a result, the FTC concluded that no modifications to the Negative Option Rule are necessary at this time. The unanimous decision to retain the rule will take effect upon publication in the Federal Register.

For more information, see here:  https://www.ftc.gov/news-events/press-releases/2014/07/ftc-will-keep-negative-option-rule-its-current-form

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