Monday, February 6, 2023

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CFPB: Issues new guidance of negative option practices

CFPB: Issues new guidance of negative option practices

  • CFPB, a U.S. government agency that makes sure banks, lenders, and other financial companies treat you fairly
  • Issued a new circular affirming that companies offering “negative option” subscription services
  • Negative-option programs include subscription services that automatically renew unless the consumer affirmatively cancels
  • Companies risk violating the law if they do not clearly and conspicuously disclose the terms of their subscription services
  • Drawing from the Federal Trade Commission’s (FTC) recent policy statement and the past enforcement cases
  • Deceptive practices that seek to trap consumers into subscriptions they don’t want are a violation of the law

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