Prohibits unfair and deceptive Internet sales practices, including misleading representations, failure to disclose material terms, and charging consumers without their express informed consent.
Definition
Excerpt
(a) Requirements for certain Internet-based sales
It shall be unlawful for any post-transaction third party seller to charge or attempt to charge any consumer's credit card, debit card, bank account, or other financial account for any good or service sold in a transaction effected on the Internet, unless—
(1) before obtaining the consumer's billing information, the post-transaction third party seller has clearly and conspicuously disclosed to the consumer all material terms of the transaction, including—
(A) a description of the goods or services being offered;
(B) the fact that the post-transaction third party seller is not affiliated with the initial merchant, which may include disclosure of the name of the post-transaction third party in a manner that clearly differentiates the post-transaction third party seller from the initial merchant; and
(C) the cost of such goods or services; and
(2) the post-transaction third party seller has received the express informed consent for the charge from the consumer whose credit card, debit card, bank account, or other financial account will be charged by—
(A) obtaining from the consumer—
(i) the full account number of the account to be charged; and
(ii) the consumer's name and address and a means to contact the consumer; and
(B) requiring the consumer to perform an additional affirmative action, such as clicking on a confirmation button or checking a box that indicates the consumer's consent to be charged the amount disclosed.
(b) Prohibition on data-pass used to facilitate certain deceptive Internet sales transactions
It shall be unlawful for an initial merchant to disclose a credit card, debit card, bank account, or other financial account number, or to disclose other billing information that is used to charge a customer of the initial merchant, to any post-transaction third party seller for use in an Internet-based sale of any goods or services from that post-transaction third party seller.
(c) Application with other law
Nothing in this chapter shall be construed to supersede, modify, or otherwise affect the requirements of the Electronic Funds Transfer Act (15 U.S.C. 1693 et seq.) or any regulation promulgated thereunder.
(d) Definitions
In this section:
(1) Initial merchant
The term "initial merchant" means a person that has obtained a consumer's billing information directly from the consumer through an Internet transaction initiated by the consumer.
(2) Post-transaction third party seller
The term "post-transaction third party seller" means a person that—
(A) sells, or offers for sale, any good or service on the Internet;
(B) solicits the purchase of such goods or services on the Internet through an initial merchant after the consumer has initiated a transaction with the initial merchant; and
(C) is not—
(i) the initial merchant;
(ii) a subsidiary or corporate affiliate of the initial merchant; or
(iii) a successor of an entity described in clause (i) or (ii).
Related cases
Vonage was held liable by the court for charging customers without their consent, failure to provide required disclosures, and not offering simple mechanisms for customers to cancel their telephone services.
ABCmouse agreed to pay $10 million and change its marketing and billing practices after the FTC found it misled consumers about cancellations, withheld information and charged memberships without consent.
Related deceptive patterns
The user finds it easy to sign up or subscribe, but when they want to cancel they find it very hard.
The user is unknowingly enrolled in a recurring subscription or payment plan without clear disclosure or their explicit consent.