FTC Issues Enforcement Policy Regarding Deceptive Practices Related To Negative Option Marketing

The policy covers three areas commonly pursued in enforcement of negative option cases: disclosures, consent, and cancellation.

The Federal Trade Commission ("FTC") recently issued an enforcement policy cautioning companies engaged in "negative option marketing" of potential legal action if the sign-up process for subscription services fails to provide clear up-front information, consumers do not provide informed consent, and cancellation is unduly burdensome. The FTC defines "negative option marketing" broadly—referring to commercial transactions in which an underlying condition or term will continue or auto-renew unless the consumer takes affirmative action to cancel the agreement or refuses the good or service. While negative options are commonplace in the market and can be beneficial for consumers, the FTC maintains that unfair or deceptive negative option practices are a prevalent source of consumer harm. As a result of the heightened awareness