Aaron Hendelman

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Companies that automatically renew customers’ subscriptions or memberships, take note. On October 16, 2024, the Federal Trade Commission (FTC) announced sweeping amendments to the Negative Option Rule, which would apply to a host of subscription-based products and services that have an auto-renewal feature (i.e., a negative option offering), including those directed to businesses. The Rule includes specific and prescriptive requirements, such as requirements to 1) obtain consumers’ affirmative consent to an auto renewal feature “separate from any other portion of the transaction,” 2) present all material terms of the transaction “immediately adjacent to” the means of recording consumer consent, and 3) allow for simple cancellation in the same medium the consumer used to consent, noting that a chatbot cancellation method would not be acceptable unless the initial transaction was made through a chatbot. Violations of the Rule would be subject to $51,744 in civil penalties per violation.Continue Reading Subscription and Auto-Renew Offerings Face New Hurdles: FTC Issues Broad “Click-to-Cancel” Rule Imposing Nationwide Requirements

On August 14, 2024, the Federal Trade Commission (FTC) issued a final rule that prohibits publishing or trading in fake or misleading consumer reviews and testimonials, or engaging in other related deceptive promotional tactics. Notably, under the FTC’s new rule, the commission will be authorized to seek civil penalties against violators.Continue Reading FTC Issues Final Rule Banning Fake and Misleading Consumer Reviews and Testimonials

Last week, the Federal Trade Commission (FTC) announced a proposed rule that would regulate a broad range of “junk fees” in consumer goods and services, from resort fees associated with travel and lodging, to delivery fees associated with meal and grocery delivery, to convenience fees associated with financial services (the proposed rule). The proposed rule would generally prohibit the omission of mandatory fees from advertised prices. If finalized, violations of the proposed rule could result in civil penalties of up to $50,120 per violation. The public has 60 days to comment after the proposal is published in the Federal Register.Continue Reading FTC Seeks Comments on Proposed Rule Requiring Disclosure of Fees in Consumer Goods and Services

In late June 2023, the Federal Trade Commission (FTC) announced revised Endorsement Guides to strengthen and clarify guidance for advertisers and address emerging market trends concerning the use of endorsements and testimonials in advertising. The FTC also announced a proposed rule banning fake reviews and testimonials.Continue Reading What’s in a Review? The FTC’s Updated Endorsement Guides and Proposed New Rule on Consumer Reviews