FTC Will Keep Negative Option Rule In Its Current Form

The Federal Trade Commission has completed its review of the Negative Option Rule and will keep the Rule in its current form.

The “Trade Regulation Rule Concerning Use of Prenotification Negative Option Plans” requires sellers to clearly disclose the terms of any such negative option plan for the sale of goods before consumers subscribe. In such plans, consumers are notified of upcoming merchandise shipments and have a set period to decline the shipment. Sellers interpret a customer’s silence, or failure to take an affirmative action, as acceptance of an offer.

In 2009, the FTC sought comments on the Negative Option Rule as part of the agency’s systematic review of all current FTC rules and guides. Although the comments received by the Commission presented some evidence of concerns with negative option marketing beyond the prenotification offers currently covered by the Rule, the Restore Online Shoppers’ Confidence Act and the Commission’s proposed amendments to the Telemarketing Sales Rule likely address many of those concerns and the Commission determined it would retain the Rule without any changes at this time.

The Commission vote approving the Notice closing review of the Negative Option Rule was 5-0. The action will become effective when the notice is published in the Federal Register. (FTC File No. P064202; the staff contact is Robert M. Frisby, Bureau of Consumer Protection, 202-326-2098.)