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Internet Marketing Compliance With Automatic Renewal Laws

By Richard Newman / October 9, 2022
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The Federal Trade Commission aggressively enforces the Restore Online Shoppers’ Confidence Act (“ROSCA”) against online marketers that offer Internet-based automatic renewals and subscriptions.  Basically, ROSCA requires the clear and conspicuous disclosure of material terms, affirmative consent to certain cancellation requirements in online transactions.

The FTC has the ability to seek monetary relief, in addition to injunctive relief, for ROSCA violations.  A violation of ROSCA is considered an unfair deceptive act or practice which subjects sellers to civil monetary penalties.  State attorneys general may also have a cause of action.

What are the Bascis of a ROSCA Violation?

Some rather obvious components of a ROSCA violation include, but not are not limited to, a misleading “risk-free” trial offer, an undisclosed charge if consumers do not quickly cancel the “risk-free” trial, an undisclosed automatic shipment program that sends consumers unordered merchandise, difficult to follow upsells that add another layer of confusion, unlawful charges to consumers’ credit or debit cards, difficult cancellation procedures, straw owners that conceal operators’ activities and/or conceal operations from payment processing  entities and banks.

Do Individual States Have Their own Automatic Renewal Laws?

Automatic renewal and subscription laws (ARLs) are in place in a number of states.  Many have even recently amended and bolstered their ARLs.  Failure to comply can result in private plaintiff actions,  class action lawsuits and regulatory action.

At the state level, approximately two-dozen states have implemented ARL legislation.  Some states impose additional consent and disclosure requirements if the subscription begins with a free trial.

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The Art of Responding to an FTC Civil Investigative Demand (CID)

By Richard Newman / September 30, 2022
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Federal Trade Commision (FTC) investigation and litigation defense attorney Richard B. Newman has written an authoritative article on JD Supra for digital marketers and FTC practice counsel.  JD Supra is a need-to-know news, insights and intelligence source that publishes and distributes valuable content produced by thought leading experts on myriad topics across numerous industries and fields, including advertising legal regulatory matters.

The article examines, in depth, the purpose of FTC civil investigative demands (CIDs), considerations relating to the nature substance of the initial response and subsequent responses, defense strategies, how to evaluate whether the recipient is a “target,” the importance of the “meet and confer” process, liability exposure and business disruption minimization tactics, persuasive written advocacy submissions, lodging objections to a CID, petitions to limit or quash, enforcement action avoidance and monetary fine minimization, how to avoid negative publicity, investigation closure and how to achieve an optimal resolution.

The article covers numerous steps that CID recipients should consider prior to, during and after learning that they are the subject of an FTC investigation.

You can read the article titled The Art of Responding to an FTC CID by an FTC CID Lawyer on JD Supra, here.  An article authored by FTC lawyer Richard B. Newman titled Considerations for Digital Marketers When Selecting Regulatory Investigation Defense Counsel is also available on JD Supra, here.

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About This Blog and Hinch Newman’s Advertising + Marketing Practice

Hinch Newman LLP’s advertising and marketing practice includes successfully resolving some of the highest-profile Federal Trade Commission (FTC) and state attorneys general digital advertising and telemarketing investigations and enforcement actions. The firm possesses superior knowledge and deep legal experience in the areas of advertising, marketing, lead generation, promotions, e-commerce, privacy and intellectual property law. Through these advertising and marketing law updates, Hinch Newman provides commentary, news and analysis on issues and trends concerning developments of interest to digital marketers, including FTC and state attorneys general compliance, civil investigative demands (CIDs), and administrative/judicial process. This blog is sponsored by Hinch Newman LLP.

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