Consumer Payment Transparency Act

Summary#

This bill requires companies that sell goods or services with automatic renewals, free trials, or negative-option features to give clear information and easy ways to cancel. Contracts must disclose these features and how to cancel. For automatic renewals, sellers must notify the consumer (using the same method the consumer used to join) at least 7 days before a renewal and explain how to cancel, including an online cancellation method and a toll-free phone number, email, postal address, or other easy method. Sellers must get the consumer's express informed consent each year before charging for a renewal. If a consumer has not used a service for 6 consecutive months since their last consent, the seller must get express consent again before charging and must tell the consumer they can end the contract and get a prorated refund. For free trials that convert to paid subscriptions, sellers must notify the consumer at least 7 days before the trial ends, explain how to cancel, and get express informed consent to charge before the trial ends. If a seller violates these rules, the automatic renewal is void and the seller must refund amounts paid because of the violation. The bill says consent obtained through "dark patterns" (user interfaces that undermine choice) is not valid. The Federal Trade Commission (FTC) will enforce the law, can make rules under the Administrative Procedure Act, and may exempt service contracts or other contracts it finds appropriate. The requirements take effect one year after the law is enacted.

What it means for you#

• Consumers: You should receive clear notices about renewals and free trials, be told how to cancel, and have an online cancellation option plus other easy methods. You must give express informed consent before annual renewals or before being charged after a free trial. If you stop using a service for 6 months, the seller must ask again before charging and must tell you about your right to end the contract and get a prorated refund. If the seller fails to follow the rules, the renewal can be voided and you can receive a refund.
• Businesses and sellers: If you offer contracts that automatically renew or convert from free to paid, you must include clear disclosures in contracts, send renewal or trial-end notices at least 7 days in advance, provide an online cancellation method and other easy cancellation options, obtain annual express informed consent before charging for renewals, and follow special rules when a consumer has not used a service for 6 months. Violations make the renewal void and require refunds. The FTC will write rules and enforce the requirements.

Expenses#

No publicly available information on the bill's costs or its budgetary effects. The bill makes violations subject to penalties and enforcement under the Federal Trade Commission Act but does not specify dollar amounts or budget details.

Proponents' View#

No publicly available information on proponents' stated views or justifications within the bill text or metadata.

Opponents' View#

No publicly available information on opponents' stated views or objections within the bill text or metadata.