Name: Navigating the New FTC Rule
Uploaded: 2025-05-08T15:46:04.411Z
Duration: 30 min 4 s
Description: Navigating the New FTC Rule

Transcript for "Navigating the New FTC Rule": Hi, everyone. Thank you so much for being here with us today. I know the countdown has been ticking for this one. We are here today with Jessica Mishler, who is our director of solutions architecture with Recurly to talk about the new FTC rule and what we're doing to help you stay compliant using Recurly. While we're waiting, while everybody is logging in, we have a fun little activity. Let's tell us what FTC stands for. But the catch is you can only use wrong answers. So just drop those in the chat. This should be fun, Jessica. I'm excited to see what everyone says. I feel bad because I'm not good at taking things off the top of my head, so I have nothing for this. Like, farmers to, I don't know, cats. I don't know. So hopefully, the audience will be more creative than I am. I don't know. Alright. It looks like we have people rolling in. So let's go ahead and go to some housekeeping just to show you how to get the most out of this session. So everybody knows we are recording. You will receive, an email with a link to view this on demand recording at your, you know, convenience. So keep an eye on your inbox for that. We would love you to ask questions. We're here to answer your questions in the q and a tab. Please drop those in the q and a tab. It helps us keep organized, and then we can use the chat to chat. And if you had any additional questions after this session, feel free to reach out to support. You can do that from directly inside of your Recurly UI or check-in with your CSM or AM, and we'll make sure you're all set up for compliance. Alright. So on to the drum roll. Thank you so much, Jessica, for being here with us today. I would like to allow you to introduce yourself because I think you're going to do a much better job of that than I am. So welcome. Thank you for being here with us today. The stage is yours. Awesome. Thank you, Ashley. Hi, everybody. As Ashley mentioned, I'm Jessica Mishler. I'm the director of our solutions architecture team here at Recurly. I've actually been in the subscription and payment solution space for seven years. I think a little over, to be quite honest. But you lose track of time when you're having fun doing things. I am a seasoned professional specializing in revenue optimization, payment gateway integrations, and essentially subscription growth for our merchants. I'm passionate about streamlining our customer experiences and building scalable systems. When I'm not nerding out on subscriptions and industry standards, you can find me on my patio with my cap and a good sci fi novel. Well, that's the ideal place to be at pretty much any time. You can probably work on your subscription, but do what you're doing for the last seven years on your patio with your cat, and it would be even more crazy. Well, thank you so so much. We really appreciate you being here, and I know, everyone here is really grateful that you're here to walk through this or to show us what's going on and explain everything to us. Okay. Well, I am going to be here. If you need anything, I'm excited to see what you've got. Thanks, Jessica. Alright, everybody. Let's go ahead and jump in. So what's on the agenda today? We are going to cover the FTC's negative option rule. We're gonna explain what it all means because there's a bunch of bullet points that they've added. We're going to take a deep dive into three specific areas, disclosures, collecting proof of consent, and those click to cancel, requirements. And then the whole time, we're gonna talk to you about strategies for making compliance with this FTC rule pretty easy. So let's jump in and talk about the negative option rule as a whole and what does it mean. So there's six new, like, major sections of this rule that we are highlighting here. The theme for the six rules is all about clarity and transparency of what is being sold to your customer. Let's start with the negative option marketing. So and let's maybe take a step back. What is what does that even mean? A lot of you might know. There's a few of you that might not. So, essentially, it's a term or condition under which a seller may interpret a a customer's silence or failure to take affirmation, as an acceptance of continuing the to receive products or to receive the offer. Good example is, you know, let's say there is a seller that sends periodic notices about offering, like, a physical goods product. The customer takes no action. Seller might actually send the goods and charge the customer. So this FTC ruling is gonna crack down on that a little bit. I think what's interesting is that this specific aspect of the rule, makes it so that this FTC negative option rule is not just for b to c customers, but b to b, companies as well. So not just affecting our direct to consumer merchants. Let's talk about material misrepresentation. Essentially, we're looking for truth in advertising here. This rule really takes a front seat for subscriptions and is paired with this disclosure rule that we're gonna talk pretty in-depth about. Essentially, if you're gonna be offering, like, a negative option rule, that offering has to be really clear in your terms of services and your disclosure. The best example for this, especially for our subscription merchants and our direct to consumer merchants, is going to be if there's an annual subscription that's gonna renew automatically if no action is taken. That has to be really clearly laid out in your offering. So let's talk about disclosure around all material terms of the deal before a customer signs up. This really pairs into material misrepresentation. We have to be clear and people have to essentially opt in, which we're gonna talk about next, for all the terms of the subscription and the offerings and what's allowed. Right? And so we're gonna go into depth of what should be said in these disclosures, how you can make them your own, and then what Recurly has to offer as far as allowing you to be compliant. So let's go ahead and go to the next slide where we're gonna talk about the next three bullet points of the negative option rule. The main one is going to be obtaining proof of consent before charging people. Again, that's going to be a checkbox next to your disclosure, a digital signature that you're gonna grab. These are gonna be important. And, again, one of the areas that we're gonna highlight and touch on where we're currently can help you and make it easy to stay in compliance. The fifth rule here is this click to cancel. Essentially, people keep calling the negative option rule, the click to cancel rule, which I think is funny, but it is the most important aspect of this essentially FTC ruling. And what does it mean for you guys? It means you have to make it easy for people to cancel the offering, based on the terms of the agreement. So maybe somebody is signing up online and they're agreeing to an annual subscription that's gonna be billed on a monthly basis, they still need to be able to go in and say, hey. I'm gonna opt out of the next year even though they're billed through the end of the year. Right? So canceling on that next subscription term, if you will. The other piece to this is if a customer signs up online, you have to make it easy for them to cancel online. You can't require somebody to sign up online and then have to come in person to a store to cancel or to call your customer service team on the phone to cancel. Cancellations should be offered in the same manner of sign up. So if somebody can sign up on the phone, they need to be able to cancel on the phone. If people sign up online, they need to be able to cancel online. That is the kind of biggest highlight and change of this click to cancel offering. The sixth bullet point that they note is that other rules and laws may apply. So this does not supersede state law. If there is a state laws that are that require more protection for consumers, you also have to be in compliance with those, first and foremost, essentially. And then, obviously, we know that there are going to be some penalties involved if we are not in compliance with this FTC ruling. So let's dig into the three areas that Recurly is really gonna help you with. Disclosures before sign up. Okay? This is where we're gonna tell our customers what they're agreeing to. If you're using Recurly checkout, we are actually working on releasing a few features to help send compliance with this. So the first one, again, is this disclosure agreement. Ours is going to be pretty static at first and generic. However, we have run this by a lawyer because it's very closely shown on the same page with the offering, this agreement so I am agreeing to pay the charges above displayed at the billing frequency on a reoccurring basis, and then we we share where you can cancel, like, on the account management page. That's going to give us what we need. What I will say for our merchants who have custom checkout pages, If you have different steps that your customer needs to go through and your plan is on one page but that disclosure agreement is on the other, it's highly recommended that the disclosure agreement actually includes the plan name, the billing frequency, and the price point. So letting them know exactly what they're signing for signing up for again, and then also letting them know, hey. If you ever wanna cancel, that is available here, here, and here. Like, maybe it's customer service and on their account management page and through a phone number. Right? All those fun things should be included, and you should have a checkbox or be obtaining a digital signature, right next to that disclosure agreement. Alright. So accepting proof of consent. Again, directly related hand in hand with that disclosure agreement. We are going to be using opt in check boxes. What you're seeing on the right at the top is our checkout options, and this is just saying, like, hey. We're we need to acquire acceptance of these recurring charges. And then what you'll see on the checkout page is that disclosure agreement, and then if the customer does not check those boxes, they will not be able to hit that pay now button. It'll be grayed out. It won't be an option for them. So they literally won't be able to sign up for your subscription unless they opt in. Now what you're seeing on the bottom right in this little proof of consent and the string is for our customers who are using a Recurly JS custom implementation. It's obviously going to be best to store some type of digital signature, in a system. We wanna make it easy for you so that you can actually store it into our system. This is a custom field that can be added to the subscription object in which you'll include a date and time stamp. IP address is optional, but a decent digital signature that doesn't include PII information. And then I've included, like, Bolin equals true just so I know that, hey. That checkbox was, you know, marked as you know, they chose it and then, I logged it in my own system. So I'm just making a record of that. This is for internal purposes so that if anybody says, hey. They didn't actually ask for my proof of consent before this, you will have this to show. Awesome. So I've been talking really quickly, and we're about to get to the most important piece. But disclosures, proof of a consent are gonna work hand in hand, and Recurly definitely has some best practices, and we have a larger document that can be shared after just around implementation and custom implementations, for our merchants who have custom checkout pages. So now we're gonna get to the funds part, which is the click to cancel section of the FTC ruling. Again, we just need to make it very easy for customers to cancel the offering that was originally provided. So Recurly actually has always made this really easy for our merchants. What we are working on is putting some warning signs if you're using our, like, hosted account management page to let you know that if you do remove the cancel button from that page, which shows up at the top right corner of that subscription offering, you could introduce some regulatory compliance risks, in different regions, specifically The United States. We are still gonna leave this as optional as not all of our merchants kind of work in The US region, and they don't have to follow the FTC ruling, but it's gonna be out there. We're gonna let you know, hey. This could be a problem. But, again, still making that cancel button optional on our hosted account management pages. Now for the majority of you, you're actually not using our hosted account management pages. You have built your own, which is awesome. It's wonderful. It makes it very flexible and usually easy for your customers to come in, see what they're buying, do upgrades, downgrades. But now we need to make it very easy to cancel. So as you'll see on the bottom right of this slide, I have a little snippet of an account management page. This is specifically one of mine, my subscriptions. And what we can see here is, like, my price point, my next bill date. Definitely used to show my payment method, but you can probably only afford a couple people to go to the mall on that. So, we did take that off. Obviously, coupon redemption gift cards, but at the very bottom, you'll notice very clearly it says cancel subscription. Now what does this button do? On the back end, they're using our APIs to let us know when to cancel that subscription. For this specific platform, they will actually cancel it at the next bill date, So I'll have access through the rest of the month, but they won't charge me again next month. I don't get any refunds, but I also keep my service for the month that I've already paid for. If you are going to be offering kind of some flexible cancellation offerings, our API endpoint can help you with that. So you can cancel at the next bill date. You can cancel at the next subscription term if they are locked in, as I mentioned before, for that year, they've agreed to that even though they're paying on a monthly basis. You can allow for terminations right away. Recurly will do refunds on proration or you can cancel right away with no refund. So a lot of flexibility in that endpoint, and the cancellation on our account management page will just be at the next bill date or term end, essentially. So a little less flexibility there and a little bit more flexibility always within our API. So it does make it nice and clear. I will say if you're offering any outlying cancellation if you have any outlier cancellation policies, you are gonna wanna make those really clear in the disclosure agreement and in your terms of service. Right? So all three of these, very much related. Recurly does wanna make it easy for you to be in compliant with this FTC ruling. And so these are the three major steps and three things that you're really gonna have to think of and how you're talking to your subscription platform. Awesome. Thank you so much for joining us today. It's a pleasure chatting with you all, and I will pass it over to Ashley if there's any last notes that we need. Thank you so much, Jessica. Whenever I heard you I think you said a little less compliance. I was just waiting for a little more rock and roll. I don't know. First thought that came to my head. Thank you so much for being on with us today, Jessica. I really appreciate you, and I know our merchants really appreciate all the information you gave them today. And just to reiterate, we will be sending out this recording as an on demand video as well as a copy of the slide deck as a download, and all those assets that you shared those resources will be linkable. Awesome. Awesome. Well, thank you, everyone. Have a wonderful week. Keep an eye on your inbox. We have office hour sessions coming up. We have one next week, where we're covering retention tools. So if you have any questions, you can just submit that, and our experts will cover them. And, again, if you have any questions about the new FTC rule, reach out to support. We will help you get configured and everything set up. Thank you. Thanks, Jessica. Bye.