The Restore Online Shoppers' Confidence Act (ROSCA) is a United States federal law passed during the

111th United States Congress The 111th United States Congress was a meeting of the legislative branch of the United States federal government from January 3, 2009, until January 3, 2011. It began during the last weeks of the George W. Bush administration, with t ...

and signed into law by President

Barack Obama Barack Hussein Obama II (born August 4, 1961) is an American politician who was the 44th president of the United States from 2009 to 2017. A member of the Democratic Party, he was the first African American president in American history. O ...

. The legislation was introduced as S.B.3386 by Senator

Jay Rockefeller John Davison "Jay" Rockefeller IV (born June 18, 1937) is an American retired politician who served as a United States senator from West Virginia (1985–2015). He was first elected to the Senate in 1984, while in office as governor of West Vir ...

( D- WV) on May 19, 2010, and signed into law on December 29, 2010. The legislation was drafted to protect online consumers from being automatically enrolled in services that would lead to them receiving recurring charges without their explicit consent. Additionally, the law places certain limits on online sellers' ability to share consumer data with third party actors.

History and background

The bill was introduced in the aftermath of the release of two reports by the committee regarding the spread of deceptive internet sales practices. One of the reports, titled "Aggressive Sales Tactics on the Internet and Their Impact on American Consumers", centered on how three companies ( Affinion, Webloyalty, and Vertrue) engaged in deceptive practices to auto-enroll consumers without their consent.{{Cite web , last=Cohan , first=Peter , date=2016-07-15 , title=How an Oil Baron's Heir Cleaned Up a $1.4 Billion Internet Scam , url=https://www.aol.com/2011-03-10-how-an-oil-barons-heir-cleaned-up-a-1-4-billion-internet-scam.html , access-date=2024-06-02 , website=AOL , language=en-US Senator

, then-chair of the Senate Committee on Commerce, Science, and Transportation, formally introduced the legislation as S.B.3386 May 19, 2010. The legislation passed both houses of Congress ultimately signed into law by President

on December 29, 2010.

Provisions

ROSCA limits sellers ability to engage in " negative option marketing", which refers to a tactic in which an online seller considers a customer's silence or inaction as acceptance of an offer and permission to charge them. The legislation mandates that online sellers disclose specific terms of their offers to customers. Additionally, the law requires covered sellers them to directly obtain consumers' billing information, rather than obtain the information through third-party online partners.

Reception and legacy

The Washington Post ''The Washington Post'', locally known as ''The'' ''Post'' and, informally, ''WaPo'' or ''WP'', is an American daily newspaper published in Washington, D.C., the national capital. It is the most widely circulated newspaper in the Washington m ...

'' reported in 2021 that the law successfully "combated some abuses, such as the sharing of sensitive customer data with third parties" and put rules in place requiring companies to implement "simple mechanisms for a consumer to stop recurring charges". However, the report noted that the law has criticism from consumer advocates, who argue the law provides companies'

loophole A loophole is an ambiguity or inadequacy in a system, such as a law or security, which can be used to circumvent or otherwise avoid the purpose, implied or explicitly stated, of the system. Originally, the word meant an arrowslit, a narrow vertic ...

s to charge customers while limiting their ability to stop recurring charges. This includes company policies that require customers to sign up for a service online but prevent cancelations using the same method, and instead require customers to call customer service during business hours to cancel.

References

Internet law in the United States Acts of the 111th United States Congress Consumer protection legislation