March 10, 2009
FTC Report on Online Negative Option Marketing
From the FTC website - February 2, 2009:
Negative option marketing can pose serious financial risks to consumers if appropriate disclosures are not made and consumers are billed for goods or services without their consent. The FTC staff has issued a report presenting five marketing principles for avoiding deception in negative option offers on the Internet, which poses unique issues not present in print or telephone marketing. In “Negative Options: An FTC Workshop Analyzing Negative Option Marketing,” the agency’s Division of Enforcement presents principles compiled from Commission law enforcement actions and a 2007 workshop where industry and consumer representatives and academics discussed consumer behavior and how to make online negative option disclosures clear and conspicuous.
The five principles address:
- Disclosing material terms in an understandable manner, without making them unnecessarily long or inconsistent;
- Making the disclosures clear and conspicuous by placing them where consumers are likely to look on Web pages, by labeling disclosures (and links to them) to indicate their importance and relevance, and by using easy-to-read fonts and colors;
- Disclosing the offer’s material terms before the consumer incurs a financial obligation;
- Obtaining consumers’ affirmative consent to the offer by, for example, having them click “I Agree” and without relying on pre-checked boxes; and
- Not impeding the effective operation of promised cancellation procedures and honoring cancellation requests that comply with such procedures.
The FTC vote approving the report was 4-0. (FTC File No. P064202. The staff contact is Melinda Claybaugh, Bureau of Consumer Protection, 202-326-2203.) Copies of the report can be found as a link to this press release on the Commission’s Web site.
Links:
Filed under FTC Reports by admin