Vendor Liaison Update - May 2012

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In my last update, I mentioned that one of the issues AALL has supported through the efforts of the Government Relations Office is the expansion of the Federal Trade Commission’s (FTC’s) Prenotification Negative Option Rule to include protection for institutional customers. Law librarians might be interested in knowing more about this rule.

History

The FTC announced in the Federal Register on May 14, 2009, that it would accept public comments on the overall costs, benefits, necessity, and regulatory and economic impact of its trade regulation rule concerning Use of Prenotification Negative Option Plans.

A ‘‘negative option’’ is any type of sales term or condition that allows a seller to interpret the customer’s silence or failure to take an affirmative step as acceptance of an offer. In a prenotification negative option plan, consumers receive periodic announcements of upcoming merchandise and have a set period to contact the company and decline the item. If they remain silent, the company sends them the merchandise.

As currently written, the FTC rule protects the interest of the private consumer only. In comments submitted by AALL in 2009 in response to the FTC’s Rule Review, AALL advocated for the expansion of the rule to include institutional consumers, such as law libraries. AALL also supported modifications to the rule to include additions to existing sets, tangentially related items, continuity plans, and trial conversions. In addition, AALL suggested that the rule should define what constitutes “acceptance” of the terms of a prenotification negative option plan and that acceptance should require an active step to indicate agreement with the terms and conditions of such a plan.

Status

Unfortunately, since the rule review period closed in late 2009, the FTC has taken no action on the prenotification rule. Matthew Wilshire, the FTC attorney who worked on this issue, suggested that law librarians may continue to file complaints with the agency related to the negative option plans. The FTC does not resolve individual consumer complaints, but complaints and comments from consumers help to identify trends and problem areas for agency consideration. If more complaints are filed on this issue, it might give the prenotification rule revision higher priority within the agency.

Information on filing a complaint is available on the FTC website. Consumers can contact the FTC by telephone or submit a secure complaint form online.