Question 1

What is ROSCA and how does it apply to online schools?

Accepted Answer

ROSCA (Restore Online Shoppers' Confidence Act) is a federal law that requires clear disclosure of material terms before charging consumers for goods or services through negative option features like automatic renewals. For online schools with subscription-based tuition, ROSCA requires disclosing auto-renewal terms, obtaining affirmative consent, and providing simple cancellation methods.

Question 2

What does California's auto-renewal law require?

Accepted Answer

California Business and Professions Code §17601-17606 requires: (1) clear and conspicuous disclosure of auto-renewal terms before purchase, (2) affirmative consent to auto-renewal separate from other terms, (3) a written acknowledgment after enrollment, (4) an easy online cancellation method, and (5) reminder notices before renewal for certain subscriptions.

Question 3

What makes a disclosure 'clear and conspicuous' under auto-renewal laws?

Accepted Answer

Clear and conspicuous means the disclosure is presented in a way that a reasonable person would notice and understand. This includes: using readable font sizes (typically at least 12pt), contrasting colors, placement near the purchase button rather than buried in terms, plain language without legal jargon, and not requiring scrolling through lengthy text to find key terms.

Question 4

Do I need to send renewal reminder notices to families?

Accepted Answer

California requires reminder notices for subscriptions with automatic renewal if the initial term exceeds one year, or for free trials that automatically convert to paid subscriptions. The notice must be sent 15-45 days before renewal and include the cancellation method. Other states have varying requirements, and even where not legally required, reminder notices are a best practice that reduces disputes and chargebacks.

Question 5

What happens if my online school violates auto-renewal laws?

Accepted Answer

Violations can result in: consumers treating the auto-renewal as void (entitled to refunds), state attorney general enforcement actions, class action lawsuits, FTC enforcement under ROSCA, penalties up to $2,500 per violation in California, and contractual provisions being deemed unenforceable. Many schools have faced significant settlements for auto-renewal violations.

Question 6

Can I require families to call to cancel enrollment?

Accepted Answer

California law requires an online cancellation option if enrollment was done online. The FTC's proposed 'click to cancel' rule would require cancellation to be as easy as signup. Even in states without specific requirements, requiring phone cancellation for online signups can trigger enforcement scrutiny and is considered a dark pattern that increases legal risk.

Auto-Renewal Compliance Checker for Online Schools

Need Help with Subscription Compliance?