Protecting consumers from online free trial scams

Caribbean American Congresswoman, Yvette D. Clarke (NY-09) and US Sen. Chris Van Hollen (D-Md.) on Dec. 1 introduced new bicameral legislation to protect consumers from online free trial scams and deceptive marketing tactics.

The lawmakers’ new bill – the Consumer Online Payment Transparency and Integrity Act, or Consumer OPT-IN Act – puts the onus on companies, instead of consumers, in renewing or extending contracts.

Clarke, the daughter of Jamaican immigrants, said that “too often, companies use free trial offers and unclear terms and conditions to trap consumers into subscriptions.”

She said that, from 2017-2019, the Better Business Bureau received 58,400 complaints related to free trials scams.

Additionally, the Brooklyn congresswoman said companies often use software and interfaces, called dark patterns that subtly trick users and make it harder for consumers to end these subscriptions and stop unwanted charges.

To help prevent these practices, Clarke said the Consumer OPT-IN Act would require companies to make a number of changes to better protect and inform consumers.

“I am proud to introduce this important legislation with Senator Van Hollen that will protect consumers and create greater levels of transparency and accountability when it comes to subscription-based services,” said Congresswoman Clarke. “All too frequently, subscription services are taking advantage of people, particularly our most vulnerable populations, and trapping them into paying for goods and services they never intended to sign up for. Enough is enough.

“Our legislation will put an end to these deceptive practices and protect consumers from being misled into endless monthly payments without their expressly given consent,” she added.

“From fitness programs to music services, subscription-based companies have taken off,” said Sen. Van Hollen. “Unfortunately, the headaches that come with trying to cancel or get a refund on these subscriptions are just as prevalent.

“As far too many Americans know first-hand, the free-trials many companies offer often lead to a cumbersome, or near-impossible, process to opt-out,” he added. “It’s time to take this burden off the American people. That’s why we’re introducing the Consumer OPT-IN Act to require companies to provide consumers their options clearly and transparently when it comes to a subscription.

“I look forward to working with Rep. Clarke to enact these necessary and common-sense consumer protections,” he continued.

Clarke said the Consumer OPT-In Act will protect consumers from deceptive free trials and marketing tactics by: Requiring companies to get express informed consent from consumers before converting free trials into automatically renewing contracts and charging consumers; requiring companies to notify consumers of the first automatic renewal and obtain express informed consent from consumers before automatically renewing long term contracts; and requiring that companies offering contracts that automatically renew on a short term basis get express informed consent from consumers annually.

She said the Act would also require companies that have knowledge that a consumer isn’t using their products or service for six months to get the consumer’s express informed consent to continue billing, and allowing consumers to request a refund for the remaining portion of the contract; provide consumers with refunds when violations occur; and give the FTC rulemaking authority over negative option contracts, automatic renewals, and dark patterns.