Sponsors (2)
The bill strengthens consumer protections against surprise recurring charges and makes cancellations easier, at the cost of higher compliance, legal uncertainty, and reduced marketing flexibility—burdens that will fall disproportionately on small businesses and may be passed to consumers.
Consumers (including low‑income and middle‑class households) will get clearer upfront disclosures, mandatory affirmative/express consent, and pre‑charge reminders before any recurring or converted free‑to‑paid charges, reducing surprise billing and unauthorized renewals.
Consumers (broad public) can cancel recurring charges more easily via a simple electronic or same‑method mechanism with clear, conspicuous cancellation instructions and timing, lowering hassle and time to stop unwanted subscriptions.
The Federal Trade Commission (and federal regulators) gain explicit authority and a clearer regulatory standard, plus an APA notice‑and‑comment rulemaking process, enabling coordinated federal enforcement and a nationwide remedy for deceptive negative‑option practices.
Merchants, especially small businesses and startups, will face material compliance costs to redesign sign‑up flows, disclosures, consent recordkeeping (3 years), and notification systems — costs that may be passed to consumers or reduce service availability.
Businesses and financial institutions will face increased litigation and legal uncertainty (recordkeeping proof burdens, ambiguous terms like 'merchant of record' and 'introductory period', and enforcement exposure), raising legal costs and dispute risks.
Companies that rely on negative‑option models or streamlined enrollment (including some free trials and promotional offers) may have to change business models or exit markets, reducing trial availability and promotional flexibility for consumers.
Based on analysis of 6 sections of legislative text.
Bans charging consumers via negative-option billing unless merchants provide clear disclosures, obtain express informed consent, offer easy cancellation, retain consent records, and follow notice rules; FTC enforcement; effective one year after enactment.
Official title: Increase consumer protection with respect to negative options in all media, including on the internet, and for other purposes.
Introduced July 10, 2025 by Brian Emanuel Schatz · Last progress July 10, 2025
Prohibits merchants from charging consumers through negative-option offers (automatic renewals, continuity plans, free-to-pay conversions, and similar) unless the merchant makes clear, conspicuous disclosure of all material terms and obtains the consumer’s express informed consent before the first charge. It requires user-friendly cancellation mechanisms, periodic and pre-deadline reminders, specific disclosures for free-to-pay conversions, and retention of proof of consent for at least three years. Gives the Federal Trade Commission enforcement authority (including rulemaking and civil remedies) and allows State attorneys general to sue on behalf of residents, preserves stronger state consumer protections, and delays the Act’s coverage until one year after enactment so contracts entered or amended before that date are excluded.