Negative Option Marketing Lawyer

negative option marketing law
Don’t get caught up in a negative option marketing scheme. It could cost you a whole lot more than a fine.

Back in the day, negative option marketing was a much-used, much-abused “get-rich-quick-online” technique. Since Internet marketing laws weren’t yet extant, and most people didn’t (and still don’t) pay much mind to minuscule credit card charges, the Internet was an incubator for piggy-back, recurring “membership marketing” schemes.

One of the easiest ways to sucker customers into subscriptions was through post-transaction offers. Consumers thought they were signing up for free add-ons, when in reality they were clicking “Hell Yeah!” to a whole lot of monthly subscription fees.

After a few years, though, lawmakers earned their Internet merit badges and passed a few laws outlawing nefarious online marketing practices. Today, it is 100% against the law to use shady post-transaction and negative option marketing techniques.

If you have a  question and want to talk with an attorney who fully understands the nuances of negative option marketing law, contact Kelly Warner. We have a dedicated team of online marketing lawyers who know their way around Internet advertising regulations and statutes.

For your reading pleasure, below are answers to commonly asked questions regarding negative option marketing law.

Is Negative Option Marketing Illegal in the United States?

Yes! Negative option marketing is illegal in the United States. Deceptively luring people to commit to a “free” service, without conspicuously disclosing an eventual charge – whether it is a onetime or recurring fee – is squarely in violation of United States Code. There are no loopholes, tricks or barely legal lines when it comes to negative option features – they are not legal.

What Is The Government’s Definition of “Negative Option Features?”

The prevailing legal definition of “negative option features” is outlined in U.S.C. Title 16, Chapter 1, Subchapter C, Part 310.2 – also known as the Telemarketing Sales Rules. It reads:

“Negative option feature” means, in an offer or agreement to sell or provide any goods or services, a provision under which the customer’s silence or failure to take an affirmative action to reject goods or services or to cancel the agreement is interpreted by the seller as acceptance of the offer.”

In What Laws Is Negative Option Marketing Addressed?

Several U.S. laws address Negative option marketing issues. Most Federal Trade Commission guidelines — like the Dot Com Disclosures, Telemarketing Sales Rule and Biz Opp marketing statutes — discuss negative option marketing. In addition, the Restore Online Shoppers’ Confidence Act includes a section specifically outlawing negative option marketing techniques.

What Happens If I Get Caught Running A Negative Option Marketing Operation?

The Federal Trade Commission does not play when it comes to punishing people who use negative option marketing techniques. If your operation is big enough – and generates a healthy profit – it’s possible to bring criminal fraud charges against you. In that worst-case scenerio, you could end up in the clink for a few years. If you’re brought up on civil charges, expect to be banned from earning money through marketing. Also, you’ll most likely be forced to fork over a whole lot of money and assets. Heck, the FTC may even go after your parents’ and spouse’s stuff.

Is Negative Option Marketing Illegal In Other English-Speaking Countries?

Yes. While it may not be called “negative option” in the United Kingdom, Australia and Canada, all three countries have laws prohibiting the practice.

What Should I Do If I Have A Negative Option Legal Matter?

If you’re faced with a negative option online marketing dilemma (for example, the FTC is blowing up your inbox or beating down your door), and you don’t know enough legalese to represent yourself pro se, contact us at Kelly Warner Law. We’re five attorneys with crypt-keeper-like knowledge of online marketing and advertising laws. We’re proud to call ourselves affiliate marketing nerds, gaming gurus and law geeks. In other words, we understand all this FTC compliance stuff and have the tools to get you through any legal hiccup. Hope to hear from you.