Negative Option Takes A Legal Hit - Round 4355634 - WickedFire - Affiliate Marketing Forum

Jon · 01-03-2011, 02:52 PM

This bill just got passed...

Bill Summary & Status - 111th Congress (2009 - 2010) - S.3386 - THOMAS (Library of Congress)

Taken from this guy's blog over at (he gave a spot on summary so he deserves credit for it): The Rockefeller Bill – Negative Option Hurt Locker | Joe Lilly

Quote:

In internet marketing news, a bill just flew through Congress that is going to put the hurt on a whole load of internet marketers. Those in the know are calling it the “Oh Shit Rockefeller” Bill. Others know it as the “Restore Online Shoppers’ Confidence Act” or simply S.3386. It is designed to prevent negative option programs, and expressly prohibits merchants from passing payment information to 3rd parties for the purpose of “post transaction sales.”

I’m a bit surprised that I haven’t seen it mentioned on any blogs or forums yet. Highlights:

- The bill expressly prohibits data transfer of any consumer financial information for the purpose of billing a 3rd party transaction. For post-transaction upsells, billing information has to be re-collected. Ouch.

- The bill requires material terms of all negative option offers to be disclosed prior to the collection of consumer billing information.

- The bill includes references to credit, debit, AND bank account information (meaning that the ACH and check 21 billers in the industry are no longer off the hook.)

Obviously this bill is going to change the way upsells, cross-sells, and negative options are marketed. At the very least it will give the FTC a new paddle with which to bitch-slap the industry. Thank you page monetization will never be the same.

PHPGator · 01-03-2011, 03:02 PM

It seems like another direct attack on rebills to me. Am I wrong on this?

Jon · 01-03-2011, 03:15 PM

Ehhh it sounds horrific but its not as bad because its being lobbied already and its still part of the one big campaign that we're backing for taxation and partial regulation for the industry.

Plus they struck this already for the call centers, or maybe this is the bill that passed that they have been talking about for nearly a year already.

It was just quiet that it passed over the holiday, but it wasn't secret in general and everyone knew it was gonna be passed eventually.

aaronklaw · 01-03-2011, 03:55 PM

While I normally promote general fear mongering, I dont think this changes a whole hell of a lot to be honest. After the Acai berry fiasco the FTC already started banhammering people that rebilled without proper disclosures. What is interesting though is that it just codifies what the FTC is already doing, so I don't see any major change here.
If anything it would lower the cost on a lot of CPA's because you no longer can rely on the upsell.

We'll be posting a full analysis in a bit.

crossfittn · 01-04-2011, 10:44 AM

Quote:

Originally Posted by aaronklaw

While I normally promote general fear mongering, I dont think this changes a whole hell of a lot to be honest. After the Acai berry fiasco the FTC already started banhammering people that rebilled without proper disclosures. What is interesting though is that it just codifies what the FTC is already doing, so I don't see any major change here.
If anything it would lower the cost on a lot of CPA's because you no longer can rely on the upsell.

We'll be posting a full analysis in a bit.

That was my reaction - this looks like cliffnotes for everything we've been doing to stay compliant since Jan 2010...

BTW who's going to limelight party?

mont7071 · 01-04-2011, 05:02 PM

Getting a lot of calls/inquiries and general "oh noes da sky is falling" about this, so I'll throw in my .02 cents.

On the Negative Option part of this bill, this is pretty much what Visa/MC have been doing anyways for the past year, the Senate Bill just codifies what is already most merchant account policies anyways, not much new there.

As to all the fears that this will kill upsells, ban free trials/continuities, etc, that isn't the case. This legislation simply prohibits passing on the CC billing details to 3rd Parties. Meaning, the original merchant that rings up the first sale is still allowed to upsell, cross-sell, etc, they can' t just arbitrarily hand over the CC details to a different merchant. More "creative" merchants will just enter into compliant "fee-splitting" arrangements with the 3rd parties that want access and will likely keep doing this, business as usual, anyways.

Realistically, merchants can still cross-sell other merchant's offers, they just have to run it through the initial merchant's account (who can fwd on or split funds in accordance with whatever agreeement they have) as long as the initial terms are disclosed.

Overall, this is probably a good thing for the industry, the guys that were collecting CC info for one sale, then giving away/selling that info to dozens of unrelated merchants to use were bringing a lot of unwanted attention and heat to legitimate merchants that offer continuity and free trials.

aaronklaw · 01-06-2011, 07:48 PM

Quote:

Originally Posted by mont7071

Getting a lot of calls/inquiries and general "oh noes da sky is falling" about this, so I'll throw in my .02 cents.

On the Negative Option part of this bill, this is pretty much what Visa/MC have been doing anyways for the past year, the Senate Bill just codifies what is already most merchant account policies anyways, not much new there.

As to all the fears that this will kill upsells, ban free trials/continuities, etc, that isn't the case. This legislation simply prohibits passing on the CC billing details to 3rd Parties. Meaning, the original merchant that rings up the first sale is still allowed to upsell, cross-sell, etc, they can' t just arbitrarily hand over the CC details to a different merchant. More "creative" merchants will just enter into compliant "fee-splitting" arrangements with the 3rd parties that want access and will likely keep doing this, business as usual, anyways.

Realistically, merchants can still cross-sell other merchant's offers, they just have to run it through the initial merchant's account (who can fwd on or split funds in accordance with whatever agreeement they have) as long as the initial terms are disclosed.

Overall, this is probably a good thing for the industry, the guys that were collecting CC info for one sale, then giving away/selling that info to dozens of unrelated merchants to use were bringing a lot of unwanted attention and heat to legitimate merchants that offer continuity and free trials.

no more credit card gang bang

thinksmarty · 01-11-2011, 09:08 PM

Did this just turn all card on file data providers into criminals?

01-03-2011, 03:02 PM	#2 (permalink)
PHPGator Senior Member Join Date: Sep 2009 Location: Oklahoma, USA Posts: 426 iTrader: 12 / 100%	It seems like another direct attack on rebills to me. Am I wrong on this? Share Share this post on Digg Del.icio.us Technorati Twitter

01-03-2011, 03:55 PM	#4 (permalink)
aaronklaw Law Ninja Join Date: Aug 2010 Location: Scottsdale, Arizona Posts: 539 iTrader: 9 / 100%	While I normally promote general fear mongering, I dont think this changes a whole hell of a lot to be honest. After the Acai berry fiasco the FTC already started banhammering people that rebilled without proper disclosures. What is interesting though is that it just codifies what the FTC is already doing, so I don't see any major change here. If anything it would lower the cost on a lot of CPA's because you no longer can rely on the upsell. We'll be posting a full analysis in a bit. Share Share this post on Digg Del.icio.us Technorati Twitter

01-04-2011, 05:02 PM	#6 (permalink)
mont7071 WF Premium Member Join Date: Feb 2009 Location: Portland, OR USA Posts: 731 iTrader: 20 / 100%	Getting a lot of calls/inquiries and general "oh noes da sky is falling" about this, so I'll throw in my .02 cents. On the Negative Option part of this bill, this is pretty much what Visa/MC have been doing anyways for the past year, the Senate Bill just codifies what is already most merchant account policies anyways, not much new there. As to all the fears that this will kill upsells, ban free trials/continuities, etc, that isn't the case. This legislation simply prohibits passing on the CC billing details to 3rd Parties. Meaning, the original merchant that rings up the first sale is still allowed to upsell, cross-sell, etc, they can' t just arbitrarily hand over the CC details to a different merchant. More "creative" merchants will just enter into compliant "fee-splitting" arrangements with the 3rd parties that want access and will likely keep doing this, business as usual, anyways. Realistically, merchants can still cross-sell other merchant's offers, they just have to run it through the initial merchant's account (who can fwd on or split funds in accordance with whatever agreeement they have) as long as the initial terms are disclosed. Overall, this is probably a good thing for the industry, the guys that were collecting CC info for one sale, then giving away/selling that info to dozens of unrelated merchants to use were bringing a lot of unwanted attention and heat to legitimate merchants that offer continuity and free trials. Share Share this post on Digg Del.icio.us Technorati Twitter

01-11-2011, 09:08 PM	#8 (permalink)
thinksmarty Lead Sales - Call Center Join Date: Oct 2009 Location: los angeles Posts: 210 iTrader: 1 / 100%	Did this just turn all card on file data providers into criminals? Share Share this post on Digg Del.icio.us Technorati Twitter

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