ARE YOU OFFERING THIRD PARTY SERVICES ON YOUR WEBSITE?
by
Mark Ishman on Oct. 26, 2012
Industry Specialties Science, Technology & Internet
Summary: The practice of injecting third party service with recurring billing into a transaction has drawn the attention and anger of federal and state regulators. To address this concern, the federal Restore Online Shopping Confidence Act (“ROSCA”) was enacted
ARE
YOU OFFERING THIRD PARTY SERVICES ON YOUR WEBSITE?
The practice of injecting third party
service with recurring billing into a transaction has drawn the attention and anger
of federal and state regulators. To
address this concern, the federal Restore Online Shopping Confidence Act (“ROSCA”) was enacted recently. The primary purpose of this law is to protect
consumers from deceptive data passing among merchants. One form of deceptive date passing among merchants
is when consumers unknowingly authorize a merchant to transfer his/her payment
information to another merchant for a separate online sale without requiring
the consumer to reenter his/her payment information and consent to the third
party transaction.
To address this concern, ROSCA has two
principal provisions to protect consumers, which are:
(1) ROSCA
requires third party sellers to disclose to consumers the terms of their offer,
and the fact that the third party seller is not affiliated with the merchant.
(2) ROSCA
also requires the third party sellers to obtain "the express informed
consent" for the charge by obtaining the account number, name and address,
and a means to contact the consumer directly
from the consumer, and requiring the consumer to check the box or perform some
other affirmative act to indicate his/her consent.
ROSCA is intended to be enforced by the
Federal Trade Commission and the State Attorneys General, but it does not rule
out private enforcement in civil litigation actions.
As an automotive dealer, if you are
offering any third party services via your website, you will need to make sure
that your “check out” procedures and disclosures are compliant with ROSCA. Such third party services offered at your
website could be financial, insurance, warranty, satellite radio, paint and
other services related to the purchased vehicle.
If your dealership’s website is offering
third party services to consumers, then it may make sense to conduct a legal
website audit of your “check out” policies and disclosures to make sure that
you are compliant with ROSCA. Otherwise
if your dealership’s website is not compliant with ROSCA, you may draw the
attention of the Federal Trade Commission, State Attorneys General and civil
plaintiff lawyers.
Mark
Ishman is the founding attorney of the Ishman Law Firm, PC. You can reach Mark
at: (919) 468-3266 or mishman@ishmanlaw.com.
