Chicago – Attorney General Kwame Raoul, as part of a coalition of 26 attorneys general, issued a letter on Monday supporting the Federal Trade Commission’s (FTC) recent notice of increased consumer protections included in proposed amendments to its Negative Option Rule.
Negative options are marketing methods used by companies to enroll consumers in subscriptions, continuity plans and programs, automatic renewals and other recurring actions. These plans and programs do not require consent for each attached recurring charge and, in some cases, a consumer’s silence is consent.
The FTC’s proposed amendments to the existing Negative Option Rule would provide more protection to consumers, clarifying terms at enrollment, offering easy and immediate cancellation options and reminders of upcoming charges.
“Deceptive billing and auto-renewal tactics employed by certain businesses are among consumers’ top complaints to my office’s Consumer Protection Division,” Raoul said. “In many cases, consumers aren’t aware they have been charged until months after the transaction. These tactics frustrate consumers, and I applaud the FTC’s efforts to address this important consumer protection issue.”
In their comment letter, Raoul and the coalition note detailed specific deceptive or unfair practices regularly seen by their respective offices, including a lack of informed consumer consent, lack of clear and conspicuous disclosures, failure to honor cancellation requests and a refusal to provide refunds. Raoul and the coalition also highlight other harmful practices, including a failure to provide consumers with simple cancellation methods as well as abusive free trial or trial conversation offers that are rampant online and throughout social media.
The coalition letter comes after the FTC gave notice recently of proposed rulemaking, seeking comment on the following proposed amendments to its Negative Option Rule:
In their letter, Raoul and the coalition express support for the FTC’s proposed amendments and offer suggestions to further enhance consumer protections.
Joining Raoul in filing the comment letter are the attorneys general of Alabama, Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, New Jersey, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Vermont, Washington and Wisconsin.