Online retailers often learn information about a consumer that may be used by them to help identify other products, services, or companies that may be of interest to the consumer. For example, if a person purchases an airplane ticket to Washington DC, the person may want information about hotels, popular restaurants, or amenities at the airport.
Although online retailers often strive to provide recommendations quickly, and to make a consumer’s transition to a third party retailer seamless, the Restore Online Shoppers’ Confidence Act (“ROSCA”) generally prohibits one online merchant from transferring payment information (e.g., a credit card number) to a second online merchant. ROSCA also prohibits the second online merchant from charging a consumer’s payment card or financial account, unless the second online merchant has clearly and conspicuously disclosed to the consumer all material terms of the transaction and received the consumer’s express consent to the charge.
$340.3 Billion
Amount spent per year by consumers online.1
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6
Number of Federal Trade Commission enforcement actions initiated under ROSCA.2
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$1.38 million
The amount that the FTC settled with lingerie seller AdoreMe, Inc. over ROSCA enforcement action.3
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100%
Percentage of ROSCA cases that have been filed by the FTC in federal district court, as opposed to an administrative adjudication.4
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Questions to consider when evaluating the data privacy issues involved in passing information between online retailers:
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Are consumers being presented with third party products or services when they visit a retailer’s website?
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Are consumers being presented with third party products or services immediately after they visit a retailer’s website?
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Are such items affirmatively selected by the consumer, or added automatically to the consumer’s shopping cart?
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If the consumer decides to purchase such third party products or services, would he or she likely think that your organization, or the third party, is processing the transaction?
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Is the total cost of each third party product clearly and conspicuously disclosed?
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If the consumer indicates that he or she wishes to buy a third party product or service, can the consumer easily change that decision?
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Is contact information being transferred from one retailer to another?
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Is payment information being transferred from one retailer to another?
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Is the third party offering a free trial offer? If so will the consumer be charged any money to participate and does the consumer need to take an affirmative act to prevent a charge after the trial period?
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Is the third party offering a continuity program or membership? If so are the terms of the program clearly and conspicuously disclosed?
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