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ARTICLE · 30 JANUARY 2023

CFPB: Negative Option Marketing Practices May Violate CFPA

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On January 19, the CFPB issued Circular 2023-01 to affirm that companies offering "negative option" subscription services are required to comply with federal consumer financial protection laws.

United StatesConsumer Protection
Moorari K. Shah
Moorari K. Shah
A.J. Dhaliwal
A.J. Dhaliwal
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On January 19, the CFPB issued Circular 2023-01 to affirm that companies offering "negative option" subscription services are required to comply with federal consumer financial protection laws. According to the Circular, "negative option" refers to a term or condition under which a seller may interpret a consumer's silence, failure to take an affirmative action to reject a product or service, or failure to cancel an agreement as acceptance or continued acceptance of the offer (see our previous blog posts on negative option marketing here and here). The CFPB warns that negative option marketing practices may violate the prohibition on unfair, deceptive, or abusive acts or practices in the CFPA where a seller:

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