H.R. 7048: Unsubscribe Act of 2025

This bill, known as the Unsubscribe Act of 2025, aims to enhance consumer protection regarding negative options in various media, especially on the internet. Here are the key provisions outlined in the bill:

Disclosure and Consent Requirements

• Clear Disclosure: Merchants must inform consumers of all relevant terms before charging them for any negative option agreements.
• Express Informed Consent: Businesses cannot charge consumers without first obtaining their clear agreement, which must be documented for at least three years.

Contract Provisions

• Limit on Renewal Terms: After an initial period, contracts must not automatically renew for longer than the original term unless explicit consent is given by the consumer to continue.
• Cancellation Mechanisms: Merchants must provide an easy way for consumers to cancel contracts. For online agreements, a straightforward electronic cancellation option must be included.

Specific Conditions for Certain Contracts

• Free-to-Pay Conversions: If a service starts as free or discounted and later transitions to a paid model, consumers must be informed of the terms upfront and receive reminders before any charges commence.

Notification Obligations

• Businesses must regularly inform consumers about the terms of their negative option contracts throughout the duration of the agreement.
• Additional notifications are required if the contract has a specific time frame for cancellation requests.

Enforcement Mechanisms

• Federal Trade Commission (FTC) Oversight: The FTC will enforce these regulations, treating violations as deceptive practices under existing law.
• State Enforcement: States are permitted to sue on behalf of their residents if they believe the law is being violated, provided they notify the FTC beforehand.

Preemption of State Laws

The bill does not override state laws unless there is a direct conflict, and states can provide greater protections than those in the federal law.

Definitions

Key terms such as "automatic renewal contract," "express informed consent," and "negative option" are defined to ensure clarity regarding the bill's application and enforcement.

Effective Date

The provisions of this Act apply to contracts entered into or amended one year after the enactment date.

Relevant Companies

• AMZN (Amazon.com, Inc.): As a major online retailer often using negative opt-in models for subscriptions, the bill could impose stricter requirements on how they enroll customers in services like Amazon Prime.
• CMCSA (Comcast Corporation): Being a provider of subscription-based cable and internet services, they would need to revise how they communicate automatic renewals to customers.
• T (AT&T Inc.): The telecommunications company may be impacted by this bill in the way they manage subscription services and customer notifications.
• NFLX (Netflix, Inc.): With numerous subscription plans automatically renewing, this bill would require them to enhance their consent and cancellation processes.
• SQ (Block, Inc.): As a payment processor, they might face changes in how their clients interact with consumers regarding subscription-based services.