FTC’s ROSCA – Cancellation Fees and Disclosure Analysis

Braden Perry, a former federal enforcement attorney who is now a regulatory and government investigations attorney with Kennyhertz Perry, discussed the Federal Trade Commissions’ (FTC) Restore Online Shopper’s Confidence Act (ROSCA) with the Capital Forum.

ROSCA was signed into law in 2010, and the FTC has recently used the statute on behalf of consumers whom the agency determines to have been harmed by negative options. Section 4 of ROSCA “generally prohibits charging consumers for goods and services sold in transactions effected on the Internet through a negative option feature…unless the seller: 1) clearly and conspicuously discloses all material terms of the transaction before obtaining the consumer’s billing information; 2) obtains a consumer’s express informed consent before charging the consumer; and 3) provides simple mechanisms for a consumer to stop recurring charges.

Perry, who regularly advises companies in FTC matters, commented on cancellation fees as a material term in online transactions: ““If I was a consumer, and I knew that if I had to cancel something I would be paying a substantial fee, I would consider that to be a material fact that I would want to know in advance.”

Perry further stated that consumer complaints are often the bellwether for determining if certain acts are material: ““If customers are complaining to the FTC or the
CFPB, the company is on the radar.” Perry also stated “the first thing I tell my clients when conducting a compliance audit is ‘let me see your complaint file.’”

To view the entire article, please visit The Capital Forum.

About Braden Perry

Braden Perry is a litigation, regulatory and government investigations attorney with Kennyhertz Perry, LLC. Mr. Perry has the unique tripartite experience of a white collar criminal defense and government compliance, investigations, and litigation attorney at a national law firm; a senior enforcement attorney at a federal regulatory agency; and the Chief Compliance Officer/Chief Regulatory Attorney of a global financial institution. Mr. Perry has extensive experience advising clients in government inquiries and investigations, particularly in enforcement matters involving emerging or novel issues. He couples his technical knowledge and experience defending clients in front of federal agencies with a broad-based understanding of compliance from an institutional and regulatory perspective.

About Kennyhertz Perry, LLC

Kennyhertz Perry, LLC is a business and litigation law firm representing clients in highly regulated industries. The firm was founded by two veteran Kansas City attorneys, John Kennyhertz and Braden Perry. To learn more about the firm, visit kennyhertzperry.com.