15 U.S.C. § 8402 — Prohibitions against certain unfair and

Page 2423 TITLE 15—COMMERCE AND TRADE § 8403 1 So in original. Probably should be ‘‘Fund’’. (5) Third party sellers offered membership clubs to consumers as they were in the process of completing their initial transactions on hundreds of websites. These third party ‘‘post- transaction’’ offers were designed to make consumers think the offers were part of the initial purchase, rather than a new trans- action with a new seller. (6) Third party sellers charged millions of consumers for membership clubs without ever obtaining consumers’ billing information, in- cluding their credit or debit card information, directly from the consumers. Because third party sellers acquired consumers’ billing infor- mation from the initial merchant through ‘‘data pass’’, millions of consumers were un- aware they had been enrolled in membership clubs. (7) The use of a ‘‘data pass’’ process defied consumers’ expectations that they could only be charged for a good or a service if they sub- mitted their billing information, including their complete credit or debit card numbers. (8) Third party sellers used a free trial pe- riod to enroll members, after which they peri- odically charged consumers until consumers affirmatively canceled the memberships. This use of ‘‘free-to-pay conversion’’ and ‘‘negative option’’ sales took advantage of consumers’ expectations that they would have an oppor- tunity to accept or reject the membership club offer at the end of the trial period. (Pub. L. 111–345, § 2, Dec. 29, 2010, 124 Stat. 3618.) Statutory Notes and Related Subsidiaries SHORT TITLE Pub. L. 111–345, § 1, Dec. 29, 2010, 124 Stat. 3618, pro- vided that: ‘‘This Act [enacting this chapter] may be cited as the ‘Restore Online Shoppers’ Confidence Act’.’’ § 8402. Prohibitions against certain unfair and deceptive Internet sales practices (a) Requirements for certain Internet-based sales It shall be unlawful for any post-transaction third party seller to charge or attempt to charge any consumer’s credit card, debit card, bank ac- count, or other financial account for any good or service sold in a transaction effected on the Internet, unless— (1) before obtaining the consumer’s billing information, the post-transaction third party seller has clearly and conspicuously disclosed to the consumer all material terms of the transaction, including— (A) a description of the goods or services being offered; (B) the fact that the post-transaction third party seller is not affiliated with the initial merchant, which may include disclosure of the name of the post-transaction third party in a manner that clearly differentiates the post-transaction third party seller from the initial merchant; and (C) the cost of such goods or services; and (2) the post-transaction third party seller has received the express informed consent for the charge from the consumer whose credit card, debit card, bank account, or other finan- cial account will be charged by— (A) obtaining from the consumer— (i) the full account number of the ac- count to be charged; and (ii) the consumer’s name and address and a means to contact the consumer; and (B) requiring the consumer to perform an additional affirmative action, such as clicking on a confirmation button or check- ing a box that indicates the consumer’s con- sent to be charged the amount disclosed. (b) Prohibition on data-pass used to facilitate certain deceptive Internet sales transactions It shall be unlawful for an initial merchant to disclose a credit card, debit card, bank account, or other financial account number, or to dis- close other billing information that is used to charge a customer of the initial merchant, to any post-transaction third party seller for use in an Internet-based sale of any goods or services from that post-transaction third party seller. (c) Application with other law Nothing in this chapter shall be construed to supersede, modify, or otherwise affect the re- quirements of the Electronic Funds 1 Transfer Act (15 U.S.C. 1693 et seq.) or any regulation pro- mulgated thereunder. (d) Definitions In this section: (1) Initial merchant The term ‘‘initial merchant’’ means a person that has obtained a consumer’s billing infor- mation directly from the consumer through an Internet transaction initiated by the con- sumer. (2) Post-transaction third party seller The term ‘‘post-transaction third party sell- er’’ means a person that— (A) sells, or offers for sale, any good or service on the Internet; (B) solicits the purchase of such goods or services on the Internet through an initial merchant after the consumer has initiated a transaction with the initial merchant; and (C) is not— (i) the initial merchant; (ii) a subsidiary or corporate affiliate of the initial merchant; or (iii) a successor of an entity described in clause (i) or (ii). (Pub. L. 111–345, § 3, Dec. 29, 2010, 124 Stat. 3619.) Editorial Notes REFERENCES IN TEXT The Electronic Fund Transfer Act, referred to in sub- sec. (c), is title IX of Pub. L. 90–321, as added by Pub. L. 95–630, title XX, § 2001, Nov. 10, 1978, 92 Stat. 3728, which is classified generally to subchapter VI (§ 1693 et seq.) of chapter 41 of this title. For complete classifica- tion of this Act to the Code, see Short Title note set out under section 1601 of this title and Tables. § 8403. Negative option marketing on the Inter- net It shall be unlawful for any person to charge or attempt to charge any consumer for any