The Consumer Financial Protection Bureau today issued an advert that subscription services that automatically re-enroll customers may violate the law if they do not clearly disclose their terms and obtain consumer consent, or if they make it “unreasonably difficult” for consumers to cancel.
“Negative option marketing” refers to a term or condition in which a seller may interpret a person’s silence or failure to cancel a deal as continued acceptance of the offer, according to the CFPB. The agency said it received complaints from consumers about being charged for products or services they had not intended to purchase or had attempted to cancel, and it has initiated enforcement actions against companies that engage in such practices. The CFPB cited enforcement actions against credit card providers offering “add-on” products as an example.
Companies offering opt-out programs risk violating the Consumer Financial Protection Act if they fail to clearly disclose opt-out terms, fail to obtain consumer consent, or mislead or prevent consumers from wishing to cancel, the CFPB said. . The agency added that it is partnering with the Federal Trade Commission to identify “shady pattern practices” that trick consumers into buying products and services they don’t want, “and both agencies will continue to monitor these practices and take agency action.” when necessary.”
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