The Federal Trade Commission recently issued a new enforcement policy statement about “dark patterns:” programs that attempt to “trap” consumers into service contracts. These programs usually take the form of negative option marketing programs, according to the FTC, and are regulated under most states' laws as well as the Restore Online Shoppers Confidence Act (ROSCA).
Negative option programs begin as a free service, with a fee charged after a certain period of time. Under both ROSCA and state laws, companies must clearly and conspicuously disclose material terms to consumers before they make a purchase. They must also get express consumer consent to the negative option program, and give people an easy way to cancel.
With this new enforcement policy statement, the FTC is indicating that it will increase its scrutiny of these programs. In the statement, the FTC warned against taking silence for acceptance, reminded companies of their obligations under ROSCA, and warned against engaging in practices that might be viewed as a deceptive or an unfair act. The policy statement gives companies some guidance‒ and reminders‒ about what is expected. These include:
- Making clear and conspicuous the terms of the program, such as the fact that the consumer will be charged and that charges may increase after an initial period.
- Disclosures should appear “immediately adjacent to the means of recording the consumers' consent” and before the consumer makes the decision to buy.
- The consent itself should be “express” and “informed.” A pre-checked box, the FTC indicated, is not sufficient. And information about the program should not be buried in “extraneous language” that isn't related to the consent.
Finally, the FTC reminds companies of the need to provide consumers with a simple and easy way to cancel negative option contracts.
Putting it Into Practice: This enforcement policy statement signals the FTC's increased scrutiny of negative option programs. It also gives direction about what it considers to be appropriate “express informed consent.”
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