S. 3386 The “Restore Online Shoppers’ Confidence Act”
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S. 3386 The "Restore Online Shoppers’ Confidence Act"
S. 3386 The "Restore Online Shoppers’ Confidence Act"
S. 3386 Restore Online Shoppers’ Confidence Act rides to the rescue…after the enemy has already been turned away.
Very quietly, amongst all of the other “rushed” legislation, on December 29,2010, Congress passed S. 3386, also known as the “Restore Online Shoppers’ Confidence Act” (without any discussing or debate I might add), to protect the consumer from the modern version of “slamming”. President Obama signed it into law on January 5, 2011. (Read/download the full text of the law here: Restore Online Shoppers’ Confidence Act).
In summary, the law is meant to stop third party partners from billing a consumer who makes an online purchase but is unknowingly presented with an additional offer from a third party that looks like it is part of the actual payment process, but is in reality a separate additional sale. It is a sales tactic called “Data Passing” as in the payment info is passed directly to the third party in the middle of the checkout process and an additional sale is generated unless the purchaser “opts out”.
It is also meant to protect consumers from questionable re-bill sales and “clubs” type programs where they have 14 days to cancel the program but the product did not arrive until 21 days later. For anyone that has ever tried to cancel these programs, it is an absolute night mare. I have personal experience with this as an elderly family member purchased a widely promoted “berry” product “trial sample” and did not realize they were signing up for a continuous monthly purchase program. It took 6 months, five phone calls, five promises to “stop” the billing, a complaint to the credit card company (who reversed all but two of the charges), and a very real threat to turn it over to the State AG’s office to get the billing stopped. Cudos to Chase!!
Protection Yes. But late to the game.
All in all it is a well intended law that does protect consumers. But it only stretches to the US Border, and it was about 8 months late. Even though Senator Rockefelller (NY) had been investigating the issue since 2009, 2009 report (1) the free market had already corrected the issue in May 2010, just after Sen. Rockefeller proposed the legislation. It is another example of the US government appearing to “protect” the consumer, long after the free market had already done the real work and banned “data pass”.
After numerous complaints from it customers, Visa, followed by the other major credit card companies, banned the practice of “Data Pass” altogether from any of their online purchase processing verifications in May 2010 and that stretches FAR beyond the US border. Problem solved right?
Then why did this have to go through Congress, the free market took care of the issue based on demand and stretches much father than the US border. Who knows why congress continues to waste our tax dollars. But here is the question KTN wants answered:
Why is the burden placed on the third party biller and not the initial seller for ALLOWING the practice on their own customers?
In the initial 2009 report, big name sites like 1-800-Flowers.com, Buy.com, Classmates.com and around 450 other sites were allowing the practice on their own customers during the check out process from the three largest practitioners of third party sellers in “Data Pass”. However, the final version of the bill places the sole responsibility of compliance on the third party seller, not the original seller. Why weren’t the original sellers held to action for selling out their own customers for a “bounty” paid by the third party that was allowed to join the checkout process in the middle?
So, even though this legislation is in place, the online consumer must still be vigilant and actually READ everything presented to them in the checkout process of any online purchase. The practice is still allowed, just with specific burdens on the third party seller for full disclosure and permission to make the third party sale, though and off brand Credit Card companies though.
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(1)Credit The Redtape Chronicles at MSNBC for the links to the initial Rockefeller staffer report.
Tags: data pass, Restore Online Shoppers’ Confidence Act, S. 3386
