A Reminder: The 3 Main Pillars of ROSCA

A Reminder: The 3 Main Pillars of ROSCA

By Sarah Steudle, Law Clerk

With so much attention focused on GDPR earlier this year, it might have been easy to lose sight of other important areas of responsible marketing, such as ROSCA - the Restore Online Shoppers’ Confidence Act – which bans online negative option billing unless a seller’s marketing content meets certain compliance requirements. ROSCA is still as important as ever, so we’d like to kick off September with a quick reminder of its three main requirements to consider when reviewing your marketing materials.

HERE IS A QUICK REMINDER OF THE THREE MAIN PILLARS OF ROSCA:

1)  Clear and conspicuous disclosure of all material terms

Your consumers need to be made aware of all material terms of a transaction before they provide you with their billing information and press that “Submit Order” button. All material terms should be stated clearly to the consumer, some examples may include:

• The total initial cost of the product, including any shipping and handling costs
• The duration of any trial period and confirmation that the consumer will be charged a specified amount when the trial expires
• Confirmation that the consumer will be enrolled in a continuity plan
• The total cost of the product under the continuity plan and the frequency of the recurring charges
• Material terms of any cancellation/refund policies
• A toll-free contact number for cancellation/refund requests

These terms also need to be disclosed conspicuously - sticking terms in barely discernible font near the bottom of a page isn’t going to cut it. And for mobile consumers, while the consumer’s screen is understandably much smaller, it still isn’t adequate to bury terms and conditions in a hyperlink, no matter how visible the hyperlink ia, or below the checkout button where a mobile consumer would have to scroll down to see.

2)  Express informed consent from the consumer

While you may have all the material terms clearly and conspicuously disclosed prior to checkout, you are still required to obtain express informed consent from a consumer before charging them.

Your consumers need to be able to indicate consent by clicking a button or checking a box which is clearly labelled that if selected or checked it will confirm the consumers’ consent to be billed, and agreement to the transaction terms (including the fact that they have been enrolled in a continuity program and subsequent charges may occur as a result).

3)  A simple mechanism for stopping recurring charges

ROSCA also requires that you provide consumers with a “simple mechanism” to be able to stop any recurring charges. That is, it should be as simple and easy for your consumers to stop recurring charges as it was to purchase the product or enroll in the continuity program in the first place.

To help ensure this, don’t make it difficult for consumers to contact you – consumers shouldn’t have to initiate numerous calls or emails to get in contact with customer service. Cancellation and refund requests should also not be delayed or withheld unreasonably, especially if the requests comply with your policies. While it is important to ensure that the material terms of your refund and cancellation policies are adequately disclosed (and not misrepresented) to your consumers along with the other material terms of the transaction, it’s just as important to have a robust customer service program in place to be able to respond to consumer requests quickly and reasonably.

IN CONCLUSION

Industry regulations, like ROSCA, are just one of the many factors that businesses need to consider when marketing online. There is a lot of important regulatory information to understand, implement, and keep track of. At Jumbleberry, we make it our business to stay up-to-date with regulations, latest trends, and news to help inform our decisions, and guide and maintain our quality standards.

FOR MORE INFORMATION

More information on ROSCA can be found on the Restore Online Shoppers’ Confidence Act website.

DISCLAIMER

The blog sets out a variety of materials to be used for educational purposes only; the author(s) do not intend the blog to be a source of legal advice. Please retain and seek the advice of a lawyer and use your own good judgement before choosing to act on any information included in the blog. If you choose to rely on the materials, you do so entirely at your own risk.