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Subscriptions and Recurring Charges and the Restore Online Shoppers' Confidence Act

Posted by Clyde Hutchins | Aug 19, 2016 | 0 Comments

As noted earlier, the Electronic Fund Transfer Act, and the corresponding Regulation E apply to subscriptions and recurring charges. But those are not the only federal laws that regulate recurring charges. The Restore Online Shoppers' Confidence Act also applies to situations where consumers purchase products or services online that have recurring charges. The Restore Online Shoppers' Confidence Act generally prohibits charging consumers for products or services sold online through a "negative option feature" unless certain conditions are met. A "negative option feature" is defined as, "an offer or agreement to sell or provide any goods or services, a provision under which the customer's silence or failure to take an affirmative action to reject goods or services or to cancel the agreement is interpreted by the seller as acceptance of the offer." In other words, the consumer is invited to make a purchase with recurring shipments and charges, and the merchant assumes that the consumer wants to keep accepting the shipments until the consumer cancels.

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