Advance Consent Marketing

Article #12

These guidelines address marketing plans where the consumer gives consent to receive and pay for goods or services in the future on a continuing or periodic basis unless and until the consumer cancels the plan.

The following principles apply to all advance consent marketing plans:

• Marketers should have the consumer's informed consent to participate in any advance consent marketing plan before the consumer is billed or charged. In telephone sales where the consumer pays in a way other than by credit or debit card, this consent must be written or audio recorded.
• Marketers may provide products or services and bills concurrently; however, consumers should not be obligated to pay bills prior to the expiration of any trial period.
• Marketers should inform consumers in the initial offer and in renewal reminders of their right to cancel their participation in the plan.
• Marketers should provide renewal reminders at the frequency specified in the initial offer. Marketers should allow consumers a reasonable length of time between receipt of renewal reminders and the renewal date, before which consumers can cancel the plan.
• Marketers should promptly honor requests for refunds due upon consumers' cancellation of the plan.

• a description of the goods or services being offered
• the identity of the marketer and contact information for service or cancellation
• the interval between shipments or services to be provided
• the price or the range of prices of the goods or services purchased by the consumer, including whether there are any additional charges
• whether the consumer will be billed or automatically charged
• when and how frequently the consumer will be billed or charged
• the fact that the consumer must take affirmative action to cancel in order to avoid future billing or charges
• the specific and easy steps that consumers should follow to cancel the plan and avoid the charges, and
• the time period if any within which the consumer must cancel

• that the current plan or renewal prices of the goods or services are subject to change
• the length of any free, trial, or approval period in time or quantity
• the length of any membership period, and the length of subsequent renewal or billing periods
• the fact that goods or services will continue after the free period unless the consumer cancels
• any minimum purchase obligations, and
• terms and conditions of any refund policy

• obtain from the consumer the last 4 digits of the account to be charged
• obtain consent from the consumer to charge such account, and
• audio record the entire transaction

• identify with specificity the account that will be charged, and
• obtain consent from the consumer to charge such account

DMA Staff Commentary:

• This article addresses plans where the consumer consents in advance to receive and pay for goods or services in the future on an ongoing basis unless and until the consumer cancels the plan. In contrast, the Federal Trade Commission's Prenotification Negative Option Rule applies to marketing plans that involve the sale of a specific number of goods, or the sale of goods or services for a specific period of time where the marketer gives the consumer advance notice before each shipment, along with the opportunity to decline the goods before delivery.
• This article is relevant to plans marketed through all media. It is important for marketers to note that the FTC's recently revised Telemarketing Sales Rule also addresses advance consent plans that are marketed to consumers by telephone and in fact, this guideline was amended to ensure consistency with the revised rule. Generally, situations where the marketer already has access to the consumer's credit card information are covered. (See www.the-dma.org/guidelines/tsr.pdf and www.the-dma.org/guidelines/tsr-guide.pdf for detailed information regarding relevant provisions of the Telemarketing Sales Rule.)
• Marketers should ensure that consumers consent to participating in marketing programs and to having their credit card accounts charged. Inadvertently surprising consumers with charges for products or services they did not consent to or misleading them by processing credit card charges or debits during what they thought was a "free trial" is not doing the right thing or enhancing consumer confidence in direct marketing.
• Advance consent marketing plans can use a variety of terminology, for instance:

Free Trial Offers
Preview Offers
"Free-to-Pay" Conversions
Automatic Renewal Plans
Continuity Programs
"On Approval" Offers


• Often membership or buying clubs and magazine subscriptions are sold via advance consent marketing plans. There are a variety of ways such plans are advertised and operated. Depending on the specific offer, trial goods or services may, or may not, be free regardless of whether the consumer continues the program. For instance, a buying club may be offered on a 3-month trial basis, after which time the consumer continues membership in the club and even if the consumer cancels after the trial period, is liable for the 3-month trial. Or, a consumer may accept a free introductory offer to a magazine, and if he or she does not wish to continue with a subscription, writes "cancel" on the invoice and does not owe for the introductory issues received. While both are fair practices, disclosures must make it clear to consumers whether or not they must pay for the trial period at the time of their agreement to participate.
• Regardless of the specific plan offered by your company, the main premise of this guideline is that a consumer must unequivocally understand the purchasing plan and give informed consent before being enrolled. This means that you should receive your prospective customer's permission before processing any charges or submitting any bills. Although you can send an invoice along with your products, you should make it clear that the consumer is not obligated to begin making payments until after the end of any promised trial, or initial, period.
• Marketers should clearly inform consumers of all important details of the offer before seeking consumer consent (whether the plan is presented in written form, online, or via a teleservices call)
• Consumers should be clearly informed of any price change in their ongoing programs and their right to cancel.
• If you call prospective customers because of their customer relationship with an unrelated marketer, and would like to charge the credit account they used for the previous purchase, you must follow the new Telemarketing Sales Rule provisions. The DMA and regulatory agencies have received numerous consumer complaints alleging that credit card account information was transferred from one marketer to another without their consent. Although there are legal and legitimate reasons for such transfers to take place, including between corporate affiliates and for credit account verification, consumers do not always understand the reasons for these transfers. In every case, consumer consent should always be on record before any charges are processed. (See www.the-dma.org/guidelines/tsr.pdf)
• Consumers need to be informed both upfront and in renewal notices about their rights to cancel participation in the program. Cancellation notices should be easy to find, read and understand. You do not have to provide a free method of canceling (such as a toll-free number), but it should be easy for the consumer to exercise the cancellation right.

Questions to Ask:

• Do your promotional materials disclose all important terms clearly and conspicuously, including what is being offered, the price of the goods (or range of prices), how frequently the consumer will receive the products offered, and how frequently the consumer will receive bills or be charged?
• Are any additional costs, such as shipping and handling (or ranges of these costs), clearly disclosed in your promotional materials?
• Do your written materials and/or teleservices script clearly state who is offering the products or services and provide contact information for customer service?
• Are consumers informed, in the initial offer and in renewal reminders, of their rights to cancel the program, and of terms and conditions in any refund policy? Are renewal reminders sent according to the promised frequency?
• Are consumers informed in renewal reminders of any changes in price, going forward, and of their right to cancel the program?
• Is a straightforward method of cancellation provided that is easily understood by the average consumer? Do you honor cancellation requests and provide any refunds due promptly?
• Do you take affirmative steps to ensure that teleservices reps follow your scripts to ensure that consumer consent is obtained prior to enrolling consumers in your marketing plan?
• Do you ask for and receive assurances from your business partners that they also comply with these guidelines in order to protect consumers?