Negative option plan is the term used to describe ads on TV, in magazine and newspaper inserts, and on the Internet such as "5 Books for $1," "10 CDs for FREE," or "4 Videos for 49¢ each." By joining clubs that offer these deals, buyers may become a member of a negative option plan, more accurately known as a "prenotification negative option plan." This means that they agree to receive merchandise automatically unless they tell the club not to send it.
Often, buyers join a negative option plan simply by accepting an introductory offer of some merchandise, often at a discounted price. Then, they pay full price for additional merchandise.
Joining a plan means you agree to the plan's sales method as long as you're a member. As a plan member, you will receive periodic announcements describing available merchandise. These announcements are important because the merchandise is sent to you automatically unless you return the form rejecting the offer within the specified time.
Each time you receive an announcement, you have two choices:
A. If you want the merchandise, do nothing. It will be sent automatically. Some plans require you to pay for the merchandise when you get it. Other plans send the merchandise "on approval," which means you can try it for a specified period. If you return the merchandise within the time alloted, you don't have to pay for it.
OR
B. If you don't want the merchandise, you must say so and return the rejection form included with the announcement within a specified time, usually 10 days. Be sure to follow the instructions on the form. Some plans also let you use the rejection form to order other merchandise.
For additional information, see the Federal Trade Commission's "Consumer Alert: Prenotification Negative Option Plans" available at www.ftc.gov/bcp/edu/pubs/consumer/products/pro09.shtm.
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