Model Federal Statute to End Customer Entrapment by Website Subscriptions

118TH CONGRESS
1ST SESSION
H. R. ____

To ensure fair, prompt, and equal cancellation and refund rights for online consumers, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

Ms. Dean introduced the following bill; which was referred to the Committee on Energy and Commerce.

A BILL

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the “Guaranteed Termination Fairness Online Act” or the “GTFO Act.”

SECTION 2. FINDINGS AND PURPOSE.

Congress finds that many websites and services design obstacles that make cancellation materially harder than enrollment, constituting unfair and deceptive acts or practices. The purpose of this Act is to ensure parity between enrollment and cancellation processes, protect consumers, and restore fairness in digital commerce.

SECTION 3. DEFINITIONS.

(1) “Covered entity” means any person or business that offers goods or services online to U.S. consumers. (2) “Equal ease” means that cancellation, termination, and refund processes take no longer and require no more effort than enrollment. (3) “Cancel” or “cancellation” means any process by which a consumer ends or unsubscribes from a service.

SECTION 4. CONSUMER RIGHT TO EQUAL EASE OF EXIT.

(a) All covered entities shall ensure cancellation and refunds are as fast, simple, and prominent as enrollment.
(b) Refunds must be processed within the same period that initial payments were processed.
(c) No entity may hide or obscure cancellation options through deceptive design or excessive steps.

SECTION 5. ENFORCEMENT AND PENALTIES.

(a) The Federal Trade Commission shall enforce this Act under section 5 of the Federal Trade Commission Act.
(b) Civil fines up to $50,000 per day or $10,000 per affected consumer.
(c) Willful violations causing losses over $1,000,000 may be punished by imprisonment up to 10 years and fines up to $5,000,000.

SECTION 6. EFFECTIVE DATE.

This Act shall take effect 180 days after enactment. Existing subscriptions shall come into compliance within 12 months.