Understanding Restore Online Shoppers Confidence Act

The Restore Online Shoppers Confidence Act establishes several mandatory requirements for online merchants. First, businesses must clearly and conspicuously disclose all material terms of negative option sales before charging consumers, including the total cost, billing frequency, and cancellation procedures. Second, merchants must obtain express informed consent from consumers before charging their payment methods. Third, companies must provide simple mechanisms for consumers to cancel subscriptions or negative option arrangements without unreasonable delays or additional obstacles. Fourth, ROSCA prohibits charging consumers without their affirmative authorization and bans the use of preauthorized billing methods obtained through deceptive means. Violations of these provisions expose businesses to Federal Trade Commission enforcement actions and private civil litigation.

Negative option sales represent a primary focus of ROSCA enforcement. These arrangements automatically renew subscriptions or charge consumers on a recurring basis unless the consumer affirmatively cancels. The Restore Online Shoppers Confidence Act requires merchants to obtain clear, express written consent that specifically acknowledges the negative option terms and pricing. Businesses must maintain records documenting consumer authorization and must honor cancellation requests promptly. New York consumers retain significant protections under ROSCA, including the right to cancel at any time without penalty and the ability to pursue civil remedies against non-compliant merchants.

Consumers harmed by ROSCA violations can pursue civil litigation against offending merchants. The statute allows consumers to recover actual damages, statutory damages of up to one thousand dollars per violation, and reasonable attorney fees and costs. This private right of action incentivizes consumer reporting and creates meaningful deterrents against violations. Many New York consumers have successfully recovered funds through ROSCA litigation when merchants charged them without proper authorization or failed to honor cancellation requests. The availability of statutory damages makes ROSCA enforcement economically viable even for individual consumer claims.

The Federal Trade Commission actively enforces ROSCA through investigations, civil litigation, and consumer redress programs. State attorneys general, including New York's Attorney General, also possess authority to prosecute ROSCA violations and seek injunctive relief. Restore Online Shoppers Confidence Act enforcement actions have resulted in substantial monetary settlements and orders requiring merchants to implement compliance programs. Government enforcement complements private litigation efforts and ensures systematic accountability for widespread violations affecting multiple consumers.

The Restore Online Shoppers Confidence Act specifically prohibits several categories of deceptive conduct. Merchants cannot misrepresent the costs, terms, or conditions of negative option sales or free trial offers. They cannot charge consumers without obtaining clear authorization, and they cannot employ tactics that make cancellation unreasonably difficult or impossible. Additionally, ROSCA prohibits using deceptive means to obtain payment information and bans charging consumers after they have requested cancellation. Businesses that engage in these practices face enforcement action by federal and state authorities and civil liability to harmed consumers.

Violations of the Restore Online Shoplers Confidence Act result in substantial penalties and remedial obligations. The Federal Trade Commission can impose civil penalties of up to forty-three thousand dollars per violation, seek consumer redress, and obtain injunctive relief requiring business cessation or restructuring. Criminal penalties include fines and imprisonment for knowing violations involving aggravated circumstances. State enforcement actions often result in settlement agreements requiring merchants to establish compliance programs, implement billing reforms, and provide restitution to affected consumers. Online child sexual exploitation cases sometimes intersect with ROSCA violations when predatory actors use deceptive billing practices to fund illegal activities, resulting in coordinated enforcement efforts.

ROSCA compliance requires merchants to maintain detailed records documenting consumer authorization and billing practices. Businesses must preserve evidence of express informed consent, including copies of disclosures provided to consumers and documentation that consumers acknowledged all material terms. Transaction records, billing statements, and cancellation requests must be retained and accessible for regulatory review. Proper documentation demonstrates good faith compliance efforts and provides critical evidence in disputes with consumers or regulatory agencies. The following table outlines essential documentation requirements for ROSCA compliance:

Effective ROSCA compliance requires establishing simple cancellation mechanisms that honor consumer requests promptly. Businesses must provide at least two cancellation methods, such as online portals, telephone lines, or email systems, that are equally accessible and easy to use. Cancellation must be processed without requiring consumers to navigate complex procedures, provide excessive information, or incur additional charges. The Restore Online Shoppers Confidence Act mandates that cancellation take effect within a specified timeframe, typically within thirty days of the consumer's request. Merchants should implement automated systems that process cancellations immediately and confirm cancellation status to consumers in writing.