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H.R. 1097: Unsubscribe Act of 2017

The text of the bill below is as of Feb 15, 2017 (Introduced).

I

115th CONGRESS

1st Session

H. R. 1097

IN THE HOUSE OF REPRESENTATIVES

February 15, 2017

(for himself and Mr. Bishop of Georgia) introduced the following bill; which was referred to the Committee on Energy and Commerce

A BILL

To increase consumer protection with respect to negative option agreements entered into on the Internet, and for other purposes.

1.

Short title

This Act may be cited as the Unsubscribe Act of 2017.

2.

Increased consumer protection with respect to negative option agreements entered into on the Internet

(a)

Cancellation of negative option agreements

No person may enter into a negative option agreement on the Internet with any consumer, unless the negative option agreement provides the consumer with a mechanism to cancel the agreement in the same manner, and by the same means, into which the agreement was entered.

(b)

Requirements for free-to-Pay conversion contracts

(1)

In general

It shall be unlawful for any person 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 free-to-pay conversion contract entered into on the Internet, unless—

(A)

before obtaining the consumer’s billing information, the person has obtained the consumer’s express informed consent to enter into the contract and has provided the consumer with a notification of the terms of the contract, including the fact that—

(i)

for an introductory period, the consumer will receive the good or service at no charge or for a nominal charge; and

(ii)

after the introductory period, the consumer will be charged or charged an increased amount for the good or service; and

(B)

before the initial charge or initial increase after the introductory period, the person requires the consumer to perform an additional affirmative action, such as clicking on a confirmation button or checking a box, which indicates the consumer’s consent to be charged the amount disclosed.

(2)

Mandatory notifications

After the introductory period in a free-to-pay conversion contract entered into on the Internet between any person and any consumer, and on a quarterly basis while the contract remains in effect, the person shall provide the consumer with a copy of the notification of the terms of the contract.

(c)

Mandatory notifications with respect to other negative option agreements

(1)

Automatic renewal contracts

With respect to an automatic renewal contract entered into on the Internet between any person and any consumer—

(A)

not later than 30 days before the end of the initial fixed period in the contract, the person shall provide the consumer with a notification of the terms of the contract; and

(B)

after the initial fixed period in the contract, and on a quarterly basis while the contract remains in effect, the person shall provide the consumer with a copy of the notification of the terms of the contract.

(2)

Continuity plan contracts

With respect to a continuity plan contract entered into on the Internet between any person and any consumer, the person shall provide the consumer with a copy of the notification of the terms of the contract on a quarterly basis while the contract remains in effect.

(d)

Regulations

The Federal Trade Commission may prescribe regulations under section 553 of title 5, United States Code, to carry out this Act.

3.

Enforcement

(a)

By Federal Trade Commission

(1)

In General

A violation of this Act or any regulation prescribed under this Act shall be treated as a violation of a rule issued under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)) regarding unfair or deceptive acts or practices. The Federal Trade Commission shall enforce this Act in the same manner, by the same means, and with the same jurisdiction, powers, and duties as though all applicable terms and provisions of the Federal Trade Commission Act (15 U.S.C. 41 et seq.) were incorporated into and made a part of this Act.

(2)

Penalties

Any person who violates this Act or any regulation prescribed under this Act shall be subject to the penalties and entitled to the privileges and immunities provided in the Federal Trade Commission Act as though all applicable terms and provisions of the Federal Trade Commission Act were incorporated in and made part of this Act.

(b)

By State Attorneys General

(1)

In general

Except as provided in paragraph (5), the attorney general of a State or other authorized State officer alleging a violation of this Act or any regulation prescribed under this Act that affects or may affect the State or the residents of the State may bring an action on behalf of the residents of the State in any United States district court for the district in which the defendant is found, resides, or transacts business, or wherever venue is proper under section 1391 of title 28, United States Code, to obtain appropriate injunctive relief.

(2)

Notice to Commission required

A State shall provide prior written notice to the Federal Trade Commission of any civil action brought under paragraph (1) with a copy of the complaint for the civil action, except that if providing such prior notice is not feasible for the State, the State shall provide notice immediately upon instituting the civil action.

(3)

Intervention by the Commission

The Federal Trade Commission may intervene in a civil action brought under paragraph (1) and upon intervening—

(A)

may be heard on all matters arising in the civil action; and

(B)

may file petitions for appeal of a decision in the civil action.

(4)

Construction

Nothing in this subsection shall be construed—

(A)

to prevent the attorney general of a State or other authorized State officer from exercising the powers conferred on the attorney general or other authorized State officer by the laws of the State; or

(B)

to prohibit the attorney general of a State or other authorized State officer from proceeding in State or Federal court on the basis of an alleged violation of any civil or criminal statute of that State.

(5)

Limitation

An action may not be brought under this subsection if, at the time the action is brought, the same alleged violation is the subject of a pending action by the Federal Trade Commission or the United States.

4.

Definitions

In this Act:

(1)

Automatic renewal contract

The term automatic renewal contract means a contract between any person and any consumer for a good or service that is automatically renewed after an initial fixed period, unless the consumer instructs otherwise.

(2)

Continuity plan contract

The term continuity plan contract means a contract between any person and any consumer under which the consumer agrees to incur charges in exchange for periodic shipments of goods or the provision of services, unless the consumer instructs otherwise.

(3)

Free-to-pay conversion contract

The term free-to-pay conversion contract means a contract between any person and any consumer under which—

(A)

for an introductory period, the consumer receives a good or service at no charge or for a nominal charge; and

(B)

after the introductory period, the consumer is charged or charged an increased amount for the good or service.

(4)

Negative option agreement

The term negative option agreement means—

(A)

an automatic renewal contract;

(B)

a continuity plan contract;

(C)

a free-to-pay conversion contract;

(D)

a pre-notification negative option plan contract; or

(E)

any combination of the contracts described in subparagraphs (A) through (D).

(5)

Notification

The term notification, when used with respect to the terms of a contract, means a written notification that clearly, conspicuously, and concisely states all material terms of the contract, including information regarding the cancellation process.

(6)

Pre-notification negative option plan contract

The term pre-notification negative option plan contract means a contract between any person and any consumer under which the consumer receives periodic notices offering goods and, unless the consumer specifically rejects the offer, the consumer automatically receives the goods and incurs a charge for such goods.

5.

Effective date

This Act shall apply with respect to contracts entered into after the date that is 1 year after the date of the enactment of this Act.