Black Friday tip: make sure your subscription offers comply with the Restore Online Shoppers’ Confidence Act (ROSCA).
The FTC recently issued a statement warning the ecommerce industry that it plans to “ramp up” enforcement related to subscription programs that automatically renew.
The statement focused on three issues: consent, disclosure, and cancellation.
Consent:
The FTC says that marketers need “affirmative, informed consent” before charging customers for an automatic renewal or “negative option” program.
Affirmative informed consent means accepting the terms of a subscription “separately from any other portion of the entire transaction,” and the FTC specifically reiterated that pre-checked boxes don’t cut it.
Disclosure:
All of the terms of a subscription offer (e.g., initial payment, recurring costs, deadline to cancel, how to cancel) need to be “clearly and conspicuously disclosed” in simple language.
That means no hiding terms behind links or requiring customers to hover their mouses over anything on a site to see the terms.
Cancellation:
You need to give customers a simple mechanism to cancel through the method they used to sign up (e.g., signing up through an app means cancellation option through the app).
The FTC said marketers should not attempt to stop the cancellation by forcing customers to click through new offers or other barriers.
We are going to see more enforcement from this new FTC regime—they have explicitly promised it.
Now’s a great time to check over your practices to make sure you’re limiting risk.