U.S. Senator Mark Pryor announced that legislation aimed at protecting online shoppers from aggressive Internet sales tactics is headed to the President's desk to be signed into law. The Restore Online Shoppers' Confidence Act passed the House of Representatives this week; it passed the Senate unanimously last month. Senator Pryor is an original co-sponsor of the bill, which was introduced by Senator John D. (Jay) Rockefeller IV (D-WV), Chairman of the U.S. Senate Committee on Commerce, Science, and Transportation.
"During the holiday season, as many Americans go online to shop for their friends and families, shady companies will try to swindle millions of dollars from shoppers by conning them into paying for unwanted services," said Senator Pryor, Chairman of the U.S. Senate Subcommittee on Consumer Protection, Product Safety, and Insurance. "This legislation will stop these deceptive practices and put shoppers back in control of their purchases. I am pleased that Congress put aside partisan politics and came together to pass this critical legislation."
The Restore Online Shoppers' Confidence Act seeks to prevent a sales tactic called "data pass marketing." Data pass marketing usually consists of the following: a consumer shops at an e-retailer's website, and during or after check-out an offer for a reward or discount that appears to be from the e-retailer is presented to the consumer. If the consumer accepts the offer or discount, he or she is registered for a service from a different merchant. Then the consumer is charged recurring fees. The first merchant has "passed" the card information to a second merchant, and consequently the consumer is often unaware that charges to his or her card will be made until the unknown transactions appear on the billing statement.
Specifically, the Restore Online Shoppers' Confidence Act will:
* Prohibit companies from using misleading post-transaction marketing by requiring them to clearly disclose the terms of the offers to consumers, and to obtain consumers' billing information, including full credit or debit card numbers, directly from the consumers.
* Prohibit Internet retailers and other commercial websites ("initial merchants") from transferring a consumer's billing information, including credit and debit card numbers, to post-transaction third party sellers.
* Require companies that use "negative options" on the Internet to meet certain minimum disclosure and enrollment requirements, so consumers will not end up paying recurring fees for goods and services they did not intend to purchase.