Negative option marketing: Difference between revisions
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'''Negative option marketing''' is a commercial practice in which a seller treats a consumer's silence or failure to act as acceptance of an offer, resulting in automatic charges.<ref name="ftc-policy">{{Cite web |title=Enforcement Policy Statement Regarding Negative Option Marketing |url=https://www.ftc.gov/system/files/documents/public_statements/1598063/negative_option_policy_statement-10-22-2021-tobureau.pdf | | '''Negative option marketing''' is a commercial practice in which a seller treats a consumer's silence or failure to act as acceptance of an offer, resulting in automatic charges.<ref name="ftc-policy">{{Cite web |date=2021-10-28 |title=Enforcement Policy Statement Regarding Negative Option Marketing |url=https://www.ftc.gov/system/files/documents/public_statements/1598063/negative_option_policy_statement-10-22-2021-tobureau.pdf |url-status=live |archive-url=https://web.archive.org/web/20260318061957if_/https://www.ftc.gov/system/files/documents/public_statements/1598063/negative_option_policy_statement-10-22-2021-tobureau.pdf |archive-date=2026-03-18 |access-date=2026-03-28 |website=Federal Trade Commission}}</ref> In the United States, the [[Federal Trade Commission]] defines four types of negative option arrangements: prenotification plans, continuity plans, automatic renewals, & free-trial conversions.<ref name="ftc-policy" /> A 2022 survey found that consumers estimated their monthly subscription spending at $86 but were paying $219, with 42% admitting they had forgotten about subscriptions they were still paying for.<ref name="cr-research">{{Cite web |date=2022 |title=Subscription Service Statistics and Costs |url=https://www.crresearch.com/blog/subscription-service-statistics-and-costs/ |url-status=live |archive-url=https://web.archive.org/web/20260322201655/https://www.crresearch.com/blog/subscription-service-statistics-and-costs/ |archive-date=2026-03-22 |access-date=2026-03-28 |website=C+R Research}}</ref> FTC enforcement actions include a $2.5 billion settlement with [[Amazon]] in September 2025 & a $100 million judgment against Vonage in November 2022.<ref name="amazon-settlement">{{Cite web |date=2025-09-25 |title=FTC Secures Historic $2.5 Billion Settlement Against Amazon |url=https://www.ftc.gov/news-events/news/press-releases/2025/09/ftc-secures-historic-25-billion-settlement-against-amazon |url-status=live |archive-url=https://web.archive.org/web/20260406124814/https://www.ftc.gov/news-events/news/press-releases/2025/09/ftc-secures-historic-25-billion-settlement-against-amazon |archive-date=2026-04-06 |access-date=2026-03-28 |website=Federal Trade Commission}}</ref><ref name="vonage">{{Cite web |date=2022-11-03 |title=FTC Action Against Vonage Results in $100 Million to Customers Trapped by Illegal Dark Patterns and Junk Fees When Trying to Cancel Service |url=https://www.ftc.gov/news-events/news/press-releases/2022/11/ftc-action-against-vonage-results-100-million-customers-trapped-illegal-dark-patterns-junk-fees-when-trying-cancel-service |url-status=live |archive-url=https://web.archive.org/web/20260318065741/https://www.ftc.gov/news-events/news/press-releases/2022/11/ftc-action-against-vonage-results-100-million-customers-trapped-illegal-dark-patterns-junk-fees-when-trying-cancel-service |archive-date=2026-03-18 |access-date=2026-03-28 |website=Federal Trade Commission}}</ref> | ||
==Types of negative option marketing== | ==Types of negative option marketing== | ||
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Negative option marketing originated in mid-20th-century mail-order commerce. Book-of-the-month clubs & record clubs used prenotification plans to ship books, records, cassettes, & CDs to subscribers who failed to return a rejection card by postal mail.<ref name="ftc-policy" /> Forgetting to mail back a card meant paying for merchandise the consumer never actively ordered. | Negative option marketing originated in mid-20th-century mail-order commerce. Book-of-the-month clubs & record clubs used prenotification plans to ship books, records, cassettes, & CDs to subscribers who failed to return a rejection card by postal mail.<ref name="ftc-policy" /> Forgetting to mail back a card meant paying for merchandise the consumer never actively ordered. | ||
Consumer complaints about these programs prompted the FTC to promulgate 16 CFR Part 425 in 1973, the original Negative Option Rule.<ref name="16cfr425">{{Cite web |title=Rule Concerning Use of Prenotification Negative Option Plans |url=https://www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-425 | | Consumer complaints about these programs prompted the FTC to promulgate 16 CFR Part 425 in 1973, the original Negative Option Rule.<ref name="16cfr425">{{Cite web |title=Rule Concerning Use of Prenotification Negative Option Plans |url=https://www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-425 |url-status=live |archive-url=https://web.archive.org/web/20250205013703/https://www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-425 |archive-date=2025-02-05 |access-date=2026-03-28 |website=Electronic Code of Federal Regulations}}</ref> The rule required sellers to disclose material terms (minimum purchase obligations, cancellation procedures, frequency of announcement mailings) before consumers subscribed. Its scope was limited to prenotification plans for physical goods; it didn't cover automatic renewals or free-trial conversions. | ||
The rise of internet commerce in the 2000s exposed this gap. Digital subscription services, SaaS products, & streaming platforms operated on automatic renewal & free-trial models that fell outside the 1973 rule's reach. Deceptive online trial offers had become widespread enough to justify a dedicated federal statute.<ref name="rosca">{{Cite web |title=Restore Online Shoppers' Confidence Act |url=https://www.congress.gov/bill/111th-congress/senate-bill/3386 | | The rise of internet commerce in the 2000s exposed this gap. Digital subscription services, SaaS products, & streaming platforms operated on automatic renewal & free-trial models that fell outside the 1973 rule's reach. Deceptive online trial offers had become widespread enough to justify a dedicated federal statute.<ref name="rosca">{{Cite web |title=Restore Online Shoppers' Confidence Act |url=https://www.congress.gov/bill/111th-congress/senate-bill/3386 |url-status=live |archive-url=https://web.archive.org/web/20250727051937/https://www.congress.gov/bill/111th-congress/senate-bill/3386 |archive-date=2025-07-27 |access-date=2026-03-28 |website=Congress.gov}}</ref> | ||
==Federal legal framework== | ==Federal legal framework== | ||
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{{Main|Click-to-cancel}} | {{Main|Click-to-cancel}} | ||
The FTC finalized the Click-to-Cancel rule in October 2024, attempting to extend the 1973 Negative Option Rule to cover all four types of negative option marketing across all media: online, telephone, print, & in-person.<ref name="latham-vacatur">{{Cite web |date=2025-07-11 |title=Eighth Circuit Vacates FTC's Click-to-Cancel Rule Days Before Compliance Deadline |url=https://www.lw.com/en/insights/eighth-circuit-vacates-ftc-click-to-cancel-rule-days-before-compliance-deadline |access-date=2026-03-28 |website=Latham & Watkins}}</ref> The rule required that the cancellation method be "at least as easy to use as the method the consumer used to initiate the negative option feature."<ref name="wilmerhale-vacatur" /> | The FTC finalized the Click-to-Cancel rule in October 2024, attempting to extend the 1973 Negative Option Rule to cover all four types of negative option marketing across all media: online, telephone, print, & in-person.<ref name="latham-vacatur">{{Cite web |date=2025-07-11 |title=Eighth Circuit Vacates FTC's Click-to-Cancel Rule Days Before Compliance Deadline |url=https://www.lw.com/en/insights/eighth-circuit-vacates-ftc-click-to-cancel-rule-days-before-compliance-deadline |url-status=live |archive-url=https://web.archive.org/web/20250724130353/https://www.lw.com/en/insights/eighth-circuit-vacates-ftc-click-to-cancel-rule-days-before-compliance-deadline |archive-date=2025-07-24 |access-date=2026-03-28 |website=Latham & Watkins}}</ref> The rule required that the cancellation method be "at least as easy to use as the method the consumer used to initiate the negative option feature."<ref name="wilmerhale-vacatur" /> | ||
Several businesses & industry trade associations filed lawsuits in multiple federal circuits. The cases were consolidated before the Eighth Circuit as ''Custom Communications, Inc. v. FTC''.<ref name="latham-vacatur" /> | Several businesses & industry trade associations filed lawsuits in multiple federal circuits. The cases were consolidated before the Eighth Circuit as ''Custom Communications, Inc. v. FTC''.<ref name="latham-vacatur" /> | ||
On July 8, 2025, six days before the rule's scheduled effective date, a unanimous three-judge panel of the Eighth Circuit vacated the Click-to-Cancel rule in its entirety.<ref name="wilmerhale-vacatur">{{Cite web |title=Eighth Circuit Vacates the FTC's "Click to Cancel" Rule, but Federal and State Regulators Likely to Remain Active |url=https://www.wilmerhale.com/en/insights/client-alerts/20250801-eighth-circuit-vacates-the-ftcs-click-to-cancel-rule-but-federal-and-state-regulators-likely-to-remain-active | | On July 8, 2025, six days before the rule's scheduled effective date, a unanimous three-judge panel of the Eighth Circuit vacated the Click-to-Cancel rule in its entirety.<ref name="wilmerhale-vacatur">{{Cite web |date=2025-08-01 |title=Eighth Circuit Vacates the FTC's "Click to Cancel" Rule, but Federal and State Regulators Likely to Remain Active |url=https://www.wilmerhale.com/en/insights/client-alerts/20250801-eighth-circuit-vacates-the-ftcs-click-to-cancel-rule-but-federal-and-state-regulators-likely-to-remain-active |url-status=live |archive-url=https://web.archive.org/web/20250907184146/https://www.wilmerhale.com/en/insights/client-alerts/20250801-eighth-circuit-vacates-the-ftcs-click-to-cancel-rule-but-federal-and-state-regulators-likely-to-remain-active |archive-date=2025-09-07 |access-date=2026-03-28 |website=WilmerHale}}</ref> The court ruled that the FTC had committed a fatal procedural error: under Section 22 of the FTC Act, the agency must conduct a preliminary regulatory analysis for any rule with an estimated annual economic impact exceeding $100 million. An Administrative Law Judge had determined the rule would exceed that threshold, but the FTC finalized the rule without publishing the required analysis.<ref name="latham-vacatur" /> The Eighth Circuit held that this omission deprived stakeholders of a meaningful opportunity to comment on the rule's economic impact & vacated the rule as procedurally deficient.<ref name="wilmerhale-vacatur" /> | ||
Over 16,000 public comments were submitted during the rulemaking process.<ref name="wilmerhale-vacatur" /> Following the vacatur, the FTC returned to ROSCA & Section 5 enforcement, while states began filling the regulatory gap with their own click-to-cancel statutes.<ref name="wilmerhale-vacatur" /> | Over 16,000 public comments were submitted during the rulemaking process.<ref name="wilmerhale-vacatur" /> Following the vacatur, the FTC returned to ROSCA & Section 5 enforcement, while states began filling the regulatory gap with their own click-to-cancel statutes.<ref name="wilmerhale-vacatur" /> | ||
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===California=== | ===California=== | ||
California's Automatic Renewal Law (Business & Professions Code 17600-17606) imposes detailed requirements on businesses offering auto-renewing subscriptions to California consumers.<ref name="ca-arl">{{Cite web |title=California Automatic Renewal Law - Business and Professions Code Sections 17600-17606 |url=https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=BPC&division=7.&title=&part=3.&chapter=1.&article=9. | | California's Automatic Renewal Law (Business & Professions Code 17600-17606) imposes detailed requirements on businesses offering auto-renewing subscriptions to California consumers.<ref name="ca-arl">{{Cite web |title=California Automatic Renewal Law - Business and Professions Code Sections 17600-17606 |url=https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=BPC&division=7.&title=&part=3.&chapter=1.&article=9. |url-status=live |archive-url=https://web.archive.org/web/20260407152524/https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=BPC&division=7.&title=&part=3.&chapter=1.&article=9.remain-active |archive-date=2026-04-07 |access-date=2026-03-28 |website=California Legislative Information}}</ref> Amendments taking effect July 1, 2025 require: | ||
*Express affirmative consent to auto-renewal terms, separate from general terms of service | *Express affirmative consent to auto-renewal terms, separate from general terms of service | ||
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===New York=== | ===New York=== | ||
New York General Business Law 527 & 527-a requires auto-renewal disclosures in a larger or contrasting font relative to surrounding text.<ref name="ny-gbl-527">{{Cite web |title=New York General Business Law Section 527 |url=https://www.nysenate.gov/legislation/laws/GBS/527 | | New York General Business Law 527 & 527-a requires auto-renewal disclosures in a larger or contrasting font relative to surrounding text.<ref name="ny-gbl-527">{{Cite web |title=New York General Business Law Section 527 |url=https://www.nysenate.gov/legislation/laws/GBS/527 |url-status=live |archive-url=https://web.archive.org/web/20250311104204/https://www.nysenate.gov/legislation/laws/GBS/527 |archive-date=2025-03-11 |access-date=2026-03-28 |website=New York State Senate}}</ref> The law mandates a post-transaction acknowledgment (email or equivalent) containing renewal terms & cancellation instructions.<ref name="ny-gbl-527a">{{Cite web |title=New York General Business Law Section 527-A |url=https://www.nysenate.gov/legislation/laws/GBS/527-A |url-status=live |archive-url=https://web.archive.org/web/20260115215428/https://www.nysenate.gov/legislation/laws/GBS/527-A |archive-date=2026-01-15 |access-date=2026-03-28 |website=New York State Senate}}</ref> For subscriptions lasting one year or longer, businesses must notify the consumer at least 15 days, but no more than 45 days, before the cancellation deadline.<ref name="ny-gbl-527a" /> | ||
===Illinois=== | ===Illinois=== | ||
The Illinois Automatic Contract Renewal Act (815 ILCS 601) bans obstructive cancellation practices & requires conspicuous upfront disclosure of auto-renewal terms.<ref name="il-acra">{{Cite web |title=815 ILCS 601 - Automatic Contract Renewal Act |url=https://www.ilga.gov/Legislation/ILCS/Articles?ActID=2363&ChapterID=67 | | The Illinois Automatic Contract Renewal Act (815 ILCS 601) bans obstructive cancellation practices & requires conspicuous upfront disclosure of auto-renewal terms.<ref name="il-acra">{{Cite web |title=815 ILCS 601 - Automatic Contract Renewal Act |url=https://www.ilga.gov/Legislation/ILCS/Articles?ActID=2363&ChapterID=67 |url-status=live |archive-url=https://web.archive.org/web/20260212041349/https://www.ilga.gov/Legislation/ILCS/Articles?ActID=2363&ChapterID=67 |archive-date=2026-02-12 |access-date=2026-03-28 |website=Illinois General Assembly}}</ref> Non-compliance renders the renewal void.<ref name="il-acra" /> | ||
==FTC enforcement actions== | ==FTC enforcement actions== | ||
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===Amazon Prime (2025)=== | ===Amazon Prime (2025)=== | ||
The FTC's September 2025 settlement with Amazon produced $2.5 billion in combined penalties: a $1 billion civil penalty (the largest for an FTC rule violation) & $1.5 billion in consumer redress.<ref name="amazon-settlement" /> The Commission alleged that Amazon used dark patterns to enroll consumers in Prime without clear consent & built a cancellation process internally dubbed the "Iliad Flow," requiring four pages, six clicks, & fifteen options before a consumer could confirm cancellation.<ref name="amazon-natlawreview">{{Cite web |title=FTC's Landmark $2.5 Billion Amazon Settlement Highlights Ongoing Focus on "Dark Patterns" |url=https://natlawreview.com/article/ftcs-landmark-25-billion-amazon-settlement-highlights-ongoing-focus-dark-patterns | | The FTC's September 2025 settlement with Amazon produced $2.5 billion in combined penalties: a $1 billion civil penalty (the largest for an FTC rule violation) & $1.5 billion in consumer redress.<ref name="amazon-settlement" /> The Commission alleged that Amazon used dark patterns to enroll consumers in Prime without clear consent & built a cancellation process internally dubbed the "Iliad Flow," requiring four pages, six clicks, & fifteen options before a consumer could confirm cancellation.<ref name="amazon-natlawreview">{{Cite web |title=FTC's Landmark $2.5 Billion Amazon Settlement Highlights Ongoing Focus on "Dark Patterns" |url=https://natlawreview.com/article/ftcs-landmark-25-billion-amazon-settlement-highlights-ongoing-focus-dark-patterns |url-status=live |archive-url=https://web.archive.org/web/20251114022354/https://natlawreview.com/article/ftcs-landmark-25-billion-amazon-settlement-highlights-ongoing-focus-dark-patterns |archive-date=2025-11-14 |access-date=2026-03-28 |website=National Law Review}}</ref><ref name="fairpatterns">{{Cite web |date=2025-10-16 |title=Amazon's $2.5B dark patterns settlement: What all e-retailers must change now |url=https://www.fairpatterns.ai/post/amazons-2-5b-dark-patterns-settlement-what-all-e-retailers-must-change-now |url-status=live |archive-url=https://web.archive.org/web/20260213031311/https://www.fairpatterns.ai/post/amazons-2-5b-dark-patterns-settlement-what-all-e-retailers-must-change-now |archive-date=2026-02-13 |access-date=2026-03-28 |website=Fair Patterns}}</ref> The FTC named senior executives, including Senior Vice President Neil Lindsay & Vice President Jamil Ghani, for personal oversight of the deceptive enrollment UI.<ref name="amazon-natlawreview" /> The case affected an estimated 35 million consumers.<ref name="amazon-settlement" /> | ||
===Vonage (2022)=== | ===Vonage (2022)=== | ||
Vonage allowed customers to sign up for its VoIP service entirely online but prohibited online cancellation. Consumers had to call a dedicated "retention" phone line. The FTC found that Vonage obscured the phone number, dropped calls, reduced operating hours, & financially incentivized agents to prevent cancellations.<ref name="vonage" /> Vonage also imposed hidden early termination fees & continued charging consumers after they cancelled. The November 2022 settlement required $100 million in consumer refunds.<ref name="vonage-refunds">{{Cite web |date=2023-10-30 |title=FTC Sends Nearly $100 Million in Refunds to Vonage Consumers Who Were Trapped in Subscriptions By Dark Patterns and Junk Fees |url=https://www.ftc.gov/news-events/news/press-releases/2023/10/ftc-sends-nearly-100-million-refunds-vonage-consumers-who-were-trapped-subscriptions-dark-patterns |access-date=2026-03-28 |website=Federal Trade Commission}}</ref> | Vonage allowed customers to sign up for its VoIP service entirely online but prohibited online cancellation. Consumers had to call a dedicated "retention" phone line. The FTC found that Vonage obscured the phone number, dropped calls, reduced operating hours, & financially incentivized agents to prevent cancellations.<ref name="vonage" /> Vonage also imposed hidden early termination fees & continued charging consumers after they cancelled. The November 2022 settlement required $100 million in consumer refunds.<ref name="vonage-refunds">{{Cite web |date=2023-10-30 |title=FTC Sends Nearly $100 Million in Refunds to Vonage Consumers Who Were Trapped in Subscriptions By Dark Patterns and Junk Fees |url=https://www.ftc.gov/news-events/news/press-releases/2023/10/ftc-sends-nearly-100-million-refunds-vonage-consumers-who-were-trapped-subscriptions-dark-patterns |url-status=live |archive-url=https://web.archive.org/web/20260318065613/https://www.ftc.gov/news-events/news/press-releases/2023/10/ftc-sends-nearly-100-million-refunds-vonage-consumers-who-were-trapped-subscriptions-dark-patterns |archive-date=2026-03-18 |access-date=2026-03-28 |website=Federal Trade Commission}}</ref> | ||
===ABCmouse (2020)=== | ===ABCmouse (2020)=== | ||
Age of Learning, Inc. marketed ABCmouse with "Special Offer" 12-month memberships at $59.95 & 30-day free trials. The FTC alleged the company failed to disclose that plans renewed automatically at full price; the auto-renewal terms were accessible only through a hyperlink to lengthy Terms & Conditions.<ref name="abcmouse">{{Cite web |title=Children's Online Learning Program ABCmouse to Pay $10 Million to Settle FTC Charges of Illegal Marketing and Billing Practices |url=https://www.ftc.gov/news-events/news/press-releases/2020/09/childrens-online-learning-program-abcmouse-pay-10-million-settle-ftc-charges-illegal-marketing | | Age of Learning, Inc. marketed ABCmouse with "Special Offer" 12-month memberships at $59.95 & 30-day free trials. The FTC alleged the company failed to disclose that plans renewed automatically at full price; the auto-renewal terms were accessible only through a hyperlink to lengthy Terms & Conditions.<ref name="abcmouse">{{Cite web |date=2020-09-01 |title=Children's Online Learning Program ABCmouse to Pay $10 Million to Settle FTC Charges of Illegal Marketing and Billing Practices |url=https://www.ftc.gov/news-events/news/press-releases/2020/09/childrens-online-learning-program-abcmouse-pay-10-million-settle-ftc-charges-illegal-marketing |url-status=live |archive-url=https://web.archive.org/web/20260407152957/https://www.ftc.gov/news-events/news/press-releases/2020/09/childrens-online-learning-program-abcmouse-pay-10-million-settle-ftc-charges-illegal-marketing |archive-date=2026-04-07 |access-date=2026-03-28 |website=Federal Trade Commission}}</ref> Hundreds of thousands of consumers visited the cancellation path but remained enrolled. The September 2020 settlement required a $10 million civil judgment.<ref name="abcmouse-blog">{{Cite web |date=2020-09-02 |title=$10 million ABCmouse settlement: Avoiding auto-renewal traps |url=https://www.ftc.gov/business-guidance/blog/2020/09/10-million-abcmouse-settlement-avoiding-auto-renewal-traps |url-status=live |archive-url=https://web.archive.org/web/20260407153025/https://www.ftc.gov/business-guidance/blog/2020/09/10-million-abcmouse-settlement-avoiding-auto-renewal-traps |archive-date=2026-04-07 |access-date=2026-03-28 |website=Federal Trade Commission}}</ref> | ||
===MoviePass (2021)=== | ===MoviePass (2021)=== | ||
MoviePass marketed a "one movie per day" subscription plan. When the model proved financially unsustainable, the company deployed hidden throttling mechanisms: resetting passwords of frequent users under the guise of "suspicious activity," implementing an overcomplicated ticket-stub verification program that locked out users, & instituting secret attendance caps.<ref name="moviepass">{{Cite web |date=2021-06-07 |title=Operators of MoviePass Subscription Service Agree to Settle FTC Allegations that They Limited Usage, Failed to Secure User Data |url=https://www.ftc.gov/news-events/news/press-releases/2021/06/operators-moviepass-subscription-service-agree-settle-ftc-allegations-they-limited-usage-failed |access-date=2026-03-28 |website=Federal Trade Commission}}</ref> The FTC argued these hidden restrictions violated ROSCA by concealing material terms. The consent order required annual data security assessments & compliance certification by a senior executive; no monetary penalty was imposed because the company had already filed for bankruptcy.<ref name="moviepass" /> | MoviePass marketed a "one movie per day" subscription plan. When the model proved financially unsustainable, the company deployed hidden throttling mechanisms: resetting passwords of frequent users under the guise of "suspicious activity," implementing an overcomplicated ticket-stub verification program that locked out users, & instituting secret attendance caps.<ref name="moviepass">{{Cite web |date=2021-06-07 |title=Operators of MoviePass Subscription Service Agree to Settle FTC Allegations that They Limited Usage, Failed to Secure User Data |url=https://www.ftc.gov/news-events/news/press-releases/2021/06/operators-moviepass-subscription-service-agree-settle-ftc-allegations-they-limited-usage-failed |url-status=live |archive-url=https://web.archive.org/web/20260109025757/https://www.ftc.gov/news-events/news/press-releases/2021/06/operators-moviepass-subscription-service-agree-settle-ftc-allegations-they-limited-usage-failed |archive-date=2026-01-09 |access-date=2026-03-28 |website=Federal Trade Commission}}</ref> The FTC argued these hidden restrictions violated ROSCA by concealing material terms. The consent order required annual data security assessments & compliance certification by a senior executive; no monetary penalty was imposed because the company had already filed for bankruptcy.<ref name="moviepass" /> | ||
===DirecTV (2015-2018)=== | ===DirecTV (2015-2018)=== | ||
In March 2015, the FTC alleged DirecTV advertised discounted 12-month packages without disclosing an automatic price increase of up to $45 per month in the second year & early termination fees of up to $480.<ref name="directv-covington">{{Cite web |date=2018-09-14 |title=District Court Dismisses Major Part of FTC Deceptive Advertising Case |url=https://www.cov.com/en/news-and-insights/insights/2018/09/district-court-dismisses-major-part-of-ftc-deceptive-advertising-case |access-date=2026-03-28 |website=Covington & Burling LLP}}</ref> The Commission sought $3.95 billion in equitable relief. The case went to a bench trial in August 2017. In August 2018, the court granted DirecTV's motion for judgment on partial findings, ruling the FTC failed to prove that DirecTV's advertising was deceptive. The FTC voluntarily dismissed the remaining claims, & the case was dismissed with prejudice in October 2018.<ref name="directv-wlf">{{Cite web |title=Lessons from FTC's Loss in, and Subsequent Abandonment of, DirecTV Advertising Case |url=https://www.wlf.org/2018/10/23/wlf-legal-pulse/lessons-from-ftcs-loss-in-and-subsequent-abandonment-of-directv-advertising-case/ | | In March 2015, the FTC alleged DirecTV advertised discounted 12-month packages without disclosing an automatic price increase of up to $45 per month in the second year & early termination fees of up to $480.<ref name="directv-covington">{{Cite web |date=2018-09-14 |title=District Court Dismisses Major Part of FTC Deceptive Advertising Case |url=https://www.cov.com/en/news-and-insights/insights/2018/09/district-court-dismisses-major-part-of-ftc-deceptive-advertising-case |url-status=live |archive-url=https://web.archive.org/web/20251118221959/https://www.cov.com/en/news-and-insights/insights/2018/09/district-court-dismisses-major-part-of-ftc-deceptive-advertising-case |archive-date=2025-11-18 |access-date=2026-03-28 |website=Covington & Burling LLP}}</ref> The Commission sought $3.95 billion in equitable relief. The case went to a bench trial in August 2017. In August 2018, the court granted DirecTV's motion for judgment on partial findings, ruling the FTC failed to prove that DirecTV's advertising was deceptive. The FTC voluntarily dismissed the remaining claims, & the case was dismissed with prejudice in October 2018.<ref name="directv-wlf">{{Cite web |date=2018-10-23 |title=Lessons from FTC's Loss in, and Subsequent Abandonment of, DirecTV Advertising Case |url=https://www.wlf.org/2018/10/23/wlf-legal-pulse/lessons-from-ftcs-loss-in-and-subsequent-abandonment-of-directv-advertising-case/ |url-status=live |archive-url=https://web.archive.org/web/20260407153431/https://www.wlf.org/2018/10/23/wlf-legal-pulse/lessons-from-ftcs-loss-in-and-subsequent-abandonment-of-directv-advertising-case/ |archive-date=2026-04-07 |access-date=2026-03-28 |website=Washington Legal Foundation}}</ref> | ||
==Common practices== | ==Common practices== | ||
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A 2022 C+R Research survey found that consumers estimated their monthly subscription spending at $86 but were paying $219, a $133-per-month gap.<ref name="cr-research" /> 42% of respondents had forgotten they were still paying for subscriptions they no longer used.<ref name="cr-research" /> | A 2022 C+R Research survey found that consumers estimated their monthly subscription spending at $86 but were paying $219, a $133-per-month gap.<ref name="cr-research" /> 42% of respondents had forgotten they were still paying for subscriptions they no longer used.<ref name="cr-research" /> | ||
CNET's 2025 subscription survey, conducted with YouGov, found the average U.S. adult spends approximately $90 per month ($1,080 per year) on subscription services, with nearly $200 per year going to unused subscriptions.<ref name="cnet-survey">{{Cite web |date=2025-05-15 |title=CNET Subscription Survey 2025 |url=https://thedesk.net/2025/05/cnet-subscription-survey-2025/ |access-date=2026-03-28 |website=The Desk}}</ref> | CNET's 2025 subscription survey, conducted with YouGov, found the average U.S. adult spends approximately $90 per month ($1,080 per year) on subscription services, with nearly $200 per year going to unused subscriptions.<ref name="cnet-survey">{{Cite web |date=2025-05-15 |title=CNET Subscription Survey 2025 |url=https://thedesk.net/2025/05/cnet-subscription-survey-2025/ |url-status=live |archive-url=https://web.archive.org/web/20250515195249/https://thedesk.net/2025/05/cnet-subscription-survey-2025/ |archive-date=2025-05-15 |access-date=2026-03-28 |website=The Desk}}</ref> | ||
===Rising complaint volume=== | ===Rising complaint volume=== | ||
The FTC's October 2024 Click-to-Cancel announcement cited nearly 70 consumer complaints per day about negative option practices, up from 42 per day in 2021.<ref name="ftc-c2c-announce">{{Cite web |title=Federal Trade Commission Announces Final "Click-to-Cancel" Rule Making It Easier for Consumers to End Recurring Subscriptions and Memberships |url=https://www.ftc.gov/news-events/news/press-releases/2024/10/federal-trade-commission-announces-final-click-cancel-rule-making-it-easier-consumers-end-recurring | | The FTC's October 2024 Click-to-Cancel announcement cited nearly 70 consumer complaints per day about negative option practices, up from 42 per day in 2021.<ref name="ftc-c2c-announce">{{Cite web |date=2024-10-16 |title=Federal Trade Commission Announces Final "Click-to-Cancel" Rule Making It Easier for Consumers to End Recurring Subscriptions and Memberships |url=https://www.ftc.gov/news-events/news/press-releases/2024/10/federal-trade-commission-announces-final-click-cancel-rule-making-it-easier-consumers-end-recurring |url-status=live |archive-url=https://web.archive.org/web/20250109032755/https://www.ftc.gov/news-events/news/press-releases/2024/10/federal-trade-commission-announces-final-click-cancel-rule-making-it-easier-consumers-end-recurring |archive-date=2025-01-09 |access-date=2026-03-28 |website=Federal Trade Commission}}</ref> | ||
==Industry opposition== | ==Industry opposition== | ||