This Act establishes strict transparency and consent requirements for businesses using automatic renewals and free-to-paid trial conversions, empowering the FTC to enforce against deceptive practices like "dark patterns."
Yvette Clarke
Representative
NY-9
The Consumer Online Payment Transparency and Integrity Act establishes strict new rules for businesses using automatic renewals and free-to-paid trial conversions. It mandates clear upfront disclosures, requires express consent for annual renewals, and demands easy, comparable cancellation methods for consumers. The Federal Trade Commission is empowered to enforce these provisions, treating violations as unfair or deceptive practices and specifically targeting the use of "dark patterns."
Subscription Services Face Mandatory Annual Consent and Refund Rules Under New Transparency Act
If you’ve ever looked at your bank statement and realized you’ve been paying $9.99 a month for a service you forgot about three years ago, this bill is aimed squarely at you. The Consumer Online Payment Transparency and Integrity Act is the legislative equivalent of forcing every subscription service to install a bright red 'Easy Cancel' button and send you a reminder that isn't buried in a spam folder.
This Act sets up strict new rules for any business selling a subscription—what the bill calls a “negative option feature”—or converting a free trial into a paid service. The core idea is simple: If they want your money, they have to work for it, and they can’t trap you. These requirements kick in one year after the law is enacted, giving companies time to update their systems.
The End of the 'Set It and Forget It' Subscription Trap
The biggest change here affects how automatic renewals work after the initial term. Currently, many services assume you want to keep paying until you actively cancel. This bill flips that script. Under SEC. 2, before the first automatic renewal, the company must send you a notice at least seven days beforehand, explaining exactly how to cancel. That notice has to include an online cancellation method that is “just as easy to use as the way you signed up for it in the first place.” No more hunting for a hidden phone number or waiting for a customer service rep.
But the real game-changer is the annual check-in. Even if you agreed to the initial contract, the seller must get your express informed consent every single year before charging you for the renewal. Think about that: your streaming service, your software subscription, or your monthly delivery box can’t just bill you indefinitely. They have to get a clear, affirmative 'yes' from you annually. If they fail to get this consent, the automatic renewal part of the contract is void, and they owe you a full refund for any charges incurred due to the violation.
Cracking Down on Free Trial Shenanigans
Free trials are another area ripe for confusion, especially when they automatically roll into a paid subscription (a “free-to-pay conversion”). This bill mandates that companies must notify you at least seven days before the trial ends, warning you that you are about to be charged. Crucially, before they charge you for the first time after the trial, they must get your express informed consent. That means no more relying on the fine print you checked off when you signed up for the trial; they need you to confirm that you actually want to start paying.
This is a massive win for consumers. Imagine signing up for a 14-day software trial to finish a quick project. Under the new rules, the company can't just start billing your credit card on day 15 because you forgot to cancel. They have to send a reminder and get your permission first. If they charge you without that consent, they have to refund you.
Banning 'Dark Patterns' and Tricky Design
The Act directly addresses one of the most frustrating aspects of modern e-commerce: “dark patterns.” The bill defines these as website or app designs that are intentionally tricky and “significantly impair the ability of a consumer to make an autonomous decision or choice.” Think of those checkout pages where the 'No, I don't want the insurance' button is tiny and gray, while the 'Yes, add it now!' button is bright green and huge. SEC. 2 makes it clear: any consent obtained using these tricky design tactics doesn't count as valid consent. This provision gives the Federal Trade Commission (FTC), which is tasked with enforcing this law under SEC. 3, a powerful new tool to police manipulative web design.
Ultimately, this legislation is about putting the power back in the hands of the consumer. It forces businesses that rely on recurring revenue to prioritize transparency and ease of cancellation over hoping you forget. While the bill gives the FTC some leeway to exempt certain service contracts, the clear, mandated annual consent and required refunds for violations are strong measures designed to end the era of accidental subscriptions and forced payments.