Nowadays, it’s just as common to shop online as it is to visit a store. More than half of U.S. adults make at least one annual Internet purchase. So, in an effort to make online shopping more secure, lawmakers enacted the Restore Online Shoppers’ Confidence Act (“ROSCA”).
The Purpose of ROSCA
The act’s prime directive is to protect consumers from high-pressure sales tactics and deceptive billing. From the Federal Trade Commission’s Website:
[The Restore Online Shoppers’ Confidence Act] prohibits any post-transaction third party seller (a seller who markets goods or services online through an initial merchant after a consumer has initiated a transaction with that merchant) from charging any financial account in an Internet transaction unless it has disclosed clearly all material terms of the transaction and obtained the consumer’s express informed consent to the charge. The seller must obtain the number of the account to be charged directly from the consumer. The Act prohibits initial merchants from disclosing purchasers’ financial account numbers or other billing information to third party sellers. In addition, for all online transactions with a negative option feature (both initial sales and post-transaction sales), the Act requires the seller to disclose clearly all material terms, obtain the consumer’s express informed consent to the charge, and provide a simple means for the consumer to stop recurring charges.
The 4 Main Things To Remember About The Restore Online Shoppers’ Confidence Act
- DO NOT “data pass” customer data in exchange for “bounties” or other material compensation without disclosing this fact BEFORE the user gives up any personal information.
- DO NOT sneakily offer a “membership club” or another type of “post transaction” offer and make it appear to be part of the deal — especially if it’s not.
- DO NOT engage in shady “free-to-pay” or “negative option” schemes in which the user doesn’t have a fighting chance of figuring out that they’re enrolling in something.
- DO NOT charge a person for anything — ever — before collecting their billing address. If you only have their credit card number, DO NOT charge it without an accompanying address.
Contact A Lawyer About The Restore Online Shoppers’ Confidence Act
Are you a startup that wants to make sure you’re ROSCA-compliant? Is the FTC accusing you of violating the Restore Online Shoppers’ Confidence Act? Either way, Kelly / Warner Law can help. Get in touch today to learn more and get your problem fixed.