Katie Bond Quoted in NutraIngredients Article on FTC’s Click-to-Cancel Rule

Keller and Heckman Partner Katie Bond was quoted in the NutraIngredients article, “FTC announces final ‘Click-to-Cancel’ rule.” The article discusses the Federal Trade Commission’s (FTC) finalized “Click-to-Cancel” rule, which requires that sellers make it as easy for consumers to cancel their enrollment in online subscriptions and memberships as it was to sign up.

Katie gave the following advice to companies so they can adapt successfully to the rule: “Get with your lawyers, get with your marketing team, and review your auto-ship or other ‘negative option’ features to ensure compliance.”

Katie also called the rule “incredibly expansive,” and added that “given the myriad ways the presentation, or substantiation, of a ‘health or safety’ claim might render the claim deceptive, the rule doesn’t seem to ‘define with’ any ‘specificity’ what practices might be violative on that point.”

According to Katie, the FTC can currently seek $51,744 per violation of a rule like the Negative Option Rule, but the courts apply a multi-factorial test that considers factors like the defendant’s good or bad faith, for example. So, “If a company is a fraud outfit, then the gush of civil penalties may well be allowed, but the outcome should be far different for a responsible company that makes a mistake (or is, at least, accused of making a mistake) along the way,” said Katie.

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