On December 29, President Obama signed the “Restore Online Shoppers’ Confidence Act” into law.  The legislation prohibits e-commerce retailers from passing customers’ billing information to post-transaction third-party sellers, and also requires post-transaction sellers to meet certain requirements before charging consumers’ financial accounts.  Specifically, the post-transaction seller must (1) disclose all material terms of the transaction, including the fact that the post-transaction seller is not affiliated with the initial retailer; and (2) obtain billing information and affirmative consent for the transaction directly from the customer. 

The Act arose out of an investigation by the Senate Committee on Commerce, Science, and Transportation into the sales practices of Affinion, Vertrue, and Webloyalty.  These post-transaction sellers offered membership club enrollment to consumers who were completing transactions at popular online retail sites, although consumers often did not understand that they were entering into a separate relationship with the membership club or that they would be charged periodic fees. Continue Reading New Law Restricts Misleading Online Sales Practices