VISA has announced an Emergency COVID-related Operational Business update.

The announcement delays VISA’s enhanced descriptor requirement until April 2021 with proactive compliance enforcement put on hold for the time being.

All other aspects of the policy including clear T&Cs upon enrollment, reminder notification, and online cancellation remain in effect as of April 18, 2020.

REFRESHER:

As we have previously outlined, here are the new requirements VISA first announced in October 2019. The rules apply to not just free trials but also introductory or discounted offers that convert to regular pricing. They will not apply to stepped-up pricing if the first term is not touted as being a promotional or introductory rate. That said, VISA encourages all merchants offering negative option plans to consider and follow the rules as a “best practice.”

1.) Enrollment Disclosures:  

Prior to this month, VISA rules required merchants offering a negative option transaction to obtain a consumer’s express informed consent to the offer by disclosing all purchase terms and conditions before initiating the initial transaction, including:

·         The name of the merchant,

·         A description of the goods and services,

·         The transaction amount and date(s) for recurring charges,

·         The length of any trial period after which the consumer will be charged for the

·         goods or services if not canceled, and

·         The merchant’s cancellation policy.

The revised rules require merchants to provide enhanced enrollment disclosures which also includes:

·         The name of the merchant

·         A description of the goods and services

·         The transaction amount and date(s) for recurring charges

·         The length of any trial period after which the consumer will be charged for the goods or services if not canceled

·         The merchant’s cancellation policy

·         That the consumer will be charged unless they take steps to cancel subsequent transactions

·         The transaction amount and transaction date for the initial transaction (even if no amount is due)

·         The last four digits of the account number to be charged (which is impossible to do if you don’t have the card yet so we are waiting for clarification, but which was apparently always required under Visa’s current stored card requirements)

·         Instructions for an easy way to cancel the agreement or subsequent charges

2) Express Informed Consent: 

Under the new rules, if the initial transaction is an Electronic Commerce Transaction (i.e., online or via mobile app) all of the above information must be clearly visible on the checkout screen, and the consumer’s express informed consent must be obtained via a “click-to-accept” button on the checkout screen

3) Notices Required To Be Sent Post Transaction:

·         Transaction Receipt: The current rules require a merchant to provide consumers with a receipt of the transaction containing a description of the purchase. The revised rules will require merchants to include all the revised enrollment disclosures noted above. This is probably already done by most of you. If you are not already adding the last four digits of the card being used this is now required on this receipt.

·         Additional Notices: The revised rules will require merchants to send a written notice to consumers containing the revised enrollment disclosures at least 7 days prior to initiating a subsequent payment transaction after the Promotional Term is going to end. This is in addition to the initial transaction receipt. This additional notice must also be sent any time the price is changing, or other terms of the agreement have changed, (in which case the additional notice must include the changed terms).

·         Combined Transaction Receipt and Additional Notice: Visa has indicated that if the Promotional Term is 7 days or less, the transaction receipt and additional notice can be one and the same document. Whether any Promotional Term that is more than 7 days would enable a combined transaction receipt/additional notice is still unclear, but Visa has indicated that a 30-day Promotional Term would not be sufficiently short to avoid having to send both a transaction receipt and the additional notice. Again, this additional notice has to be sent no less than 7 days before the end of the Promotional Term.

4) Method of Dissemination:

If a consumer’s consent to future transactions occurs on a website or via a mobile app, the receipt/confirmation and future notices must be sent by email or text, which may be problematic for transactions conducted by phone or through mail order where an email address or mobile number may not be collected. To date, VISA has not articulated what it expects under these circumstances. 

5) Billing Descriptors:

This requirement VISA just postponed to April 2021:

After the Promotional Term, the first full charge must include a billing descriptor that indicates it is the end of the initial term/offer. The suggestion provided by Visa was 8 characters “endtrial” –  but with only 25 characters to work with and with “trial” not being applicable to all promotional offers this could be confusing.

6) Cancellation:

Merchants must provide a simple way for consumers to cancel to avoid future charges. If the notices required are sent via email, the notice must contain a link to a page on the merchant’s website where the agreement, order, or any subsequent transaction can be easily canceled. This mirrors the requirement for Wash DC. The online cancelation is required regardless of how the consumer signed up for the products or services.