How to Protect Yourself: Negative Option Marketing Plans
How to Protect Yourself: Negative Option Marketing Plans
Source: Florida Attorney General's Office
Have you ever received a Notice stating that you will be automatically billed for a product or service unless you affirmatively decline by sending a reply card or calling the company? These are Negative Option Marketing Plans. As a consumer, you need to understand the company's advantage under these plans. If you do not send that reply card back within the specified time, you have bought that item. These plans are typically used in the "Book-of-the-Month" type clubs.
Florida Negative Option RuleUnder the Federal Negative Option Rule, sellers must clearly and conspicuously disclose certain information including:
- How many selections you must buy;
- How and when you may cancel your membership;
- How to notify the Seller when you do not choose an item;
- How postage and handling is charged;
- How often you will receive the announcements
How to Protect Yourself:
While these plans may, at first, appear enticing because
they offer reduced price or "free" merchandise,
be certain you understand the overall cost. For example,
be certain that to receive the "three free compact
discs," you can afford the six you MUST purchase
within the three month period. If you subscribe, be
certain to keep a copy of the seller's promotional
materials and the contract. This will become a quick
reference if questions later arise. Be certain you
understand the return deadline to the seller to
"CANCEL" the selection. Otherwise, you may be
bound to keep and pay for the item. Book or Record Clubs,
where you agree to the negative option plan, are
different from sellers that automatically charge for an
item you have not ordered. For example, Congress has
outlawed Negative Option marketing by cable television
companies; and Florida has adopted a "Free Gift
Law" where you can keep unordered merchandise with
no obligation to pay for it.