As part of the Federal Trade Commission's (FTC) regular rule and guidelines review process, it recently reviewed the rule governing the "Use of Prenotification Negative Option Plans" (Negative Option Rule). Under a "prenotification negative option" plan, consumers receive periodic announcements of upcoming merchandise shipments and have a set period of time to decline the shipment. If the consumer fails to decline the shipment, the company ships the merchandise and bills the consumer. The Negative Option Rule requires sellers to clearly disclose the terms of any such negative option plan before consumers subscribe.
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