On December 29th President Obama signed into law Senate Bill 3386 the “Restore Online Shoppers’ Confidence Act”. This one really snuck by our industry and it did not show up on my radar until Joe Lilly wrote about it on his blog. If you don’t know Joe Lilly, he is former president of an INC 500 powerhouse in the specialty finance industry and is one of the smartest guys I know in our industry.
Here are the highlights from his post:
- The bill expressly prohibits data transfer of any consumer financial information for the purpose of billing a 3rd party transaction. For post-transaction upsells, billing information has to be re-collected. Ouch.
- The bill requires material terms of all negative option offers to be disclosed prior to the collection of consumer billing information.
- The bill includes references to credit, debit, AND bank account information (meaning that the ACH and check 21 billers in the industry are no longer off the hook.)
Considering most affiliate offers in the re-bill space work off of the model of the, “break even or lose money on the front end because we will make lots of money from pitching our other products, pitching other people’s products, or selling user data” model. This is a HUGE one.
How in the hell is this going to be enforced? Especially for offers outside of the USA. Will they go after affiliate networks pushing these offers?
I assume the goal in this bill was to go after all the Acai Berry, Grant, and Make Money Online negative option re bill offers that have the “FREE, just pay shipping, then we fuck you for the rest of your life and hide behind a bazillion shell companies” model. But who knows.
Think about this for a second. Specifically this part. “ for post-transaction upsells, billing information has to be re-collected”.
Unless I am missing something, virtually everyone selling a product on Clickbank is now a criminal. (besides the non FTC compliance).
Also Amazon, Omaha Steaks, and every other company that tries to upsell me is now breaking the law.
Am I reading all this right? Did 99% of Internet marketers just become criminals, according to information from the Ladan Law firm, P.A.?
Did this just sneak through much like the gambling “Unlawful Internet Gambling Enforcement Act” which didn’t make it illegal to gamble online… It just made the software which allowed you to gamble online illegal… which basically made all online gambling illegal. Costing the USA an estimated 5 trillion dollars in taxable revenue (don’t even get me started on this).
I am hoping I am reading this wrong…. Hopefully Joe and other industry/legal experts will weigh in soon.
Whats your take?