Following Court Ruling Blocking Click-To-Cancel Rule, Sens Schatz, Kennedy Introduce Legislation To Stop Deceptive Subscription Business Practices

Following a ruling from a federal court that blocked the Federal Trade Commission’s “click-to-cancel” rule, Sens Brian Schatz (D-HI) and John Kennedy (R-LA) introduced the Unsubscribe Act. The bipartisan bill would require companies to be more transparent about their subscription-based business models and make it easier for consumers to cancel their subscriptions once their free or reduced-price trial period has ended. The Unsubscribe Act would:

• Require sellers to provide customers with a clear understanding of all the terms of the contract and obtain the customer’s express and informed consent;
• Require sellers to provide a simple means of canceling the subscription, which the customer can complete in the same way in which the original contract was entered into;
• Require sellers to provide a clear notice to consumers when their free or reduced-cost trial is complete and before charging for the full-cost subscription;
• Disallow automatic transfer to a contract beyond the preliminary period; and
• Require sellers to periodically notify the customer of the terms of the contract and the cancelation mechanism.