The practice of injecting third party service with recurring billing into a transaction has drawn the attention and anger of federal and state regulators. To address this concern, Congress enacted the federal Restore Online Shopping Confidence Act (“ROSCA”). The primary purpose of this law is to protect consumers from deceptive data passing among merchants. One form of deceptive date passing among merchants is when consumers unknowingly authorize a merchant to transfer his/her payment information to another merchant for a separate online sale without requiring the consumer to reenter his/her payment information and consent to the third party transaction.
To address this concern, ROSCA has two principal provisions to protect consumers, which are:
(1) ROSCA requires third party sellers to disclose to consumers the terms of their offer, and the fact that the third party seller is not affiliated with the merchant.
(2) ROSCA also requires the third party sellers to obtain “the express informed consent” for the charge by obtaining the account number, name and address, and a means to contact the consumer directly from the consumer, and requiring the consumer to check the box or perform some other affirmative act to indicate his/her consent.
ROSCA is intended to be enforced by the Federal Trade Commission and the State Attorneys General, but it does not rule out private enforcement in civil litigation actions.
As an automotive dealer, if you are offering any third party services via your website, you will need to make sure that your “check out” procedures and disclosures are compliant with ROSCA. Such third party services offered at your website could be financial, insurance, warranty, satellite radio, paint and other services related to the purchased vehicle.
If your dealership’s website is offering third party services to consumers, then it may make sense to conduct a legal website audit of your “check out” policies and disclosures to make sure that you are compliant with ROSCA. Otherwise if your dealership’s website is not compliant with ROSCA, you may draw the attention of the Federal Trade Commission, State Attorneys General and civil plaintiff lawyers.
Mark Ishman is the founding attorney of the Ishman Law Firm, PC. You can reach Mark at: (919) 468-3266 or firstname.lastname@example.org. For additional information on this topic as well as other related topics, please visit www.IshmanLaw.com and www.IshmanLegal.com.