A class action lawsuit was filed against the owners of three merchant websites where allegedly the merchants, without authorization, transmitted the plaintiffs’ credit card information to a third party following certain purchases. The plaintiffs alleged that the third party recipient of this information then engaged in negative option marketing. The plaintiffs brought a number of claims, including violation of the Wiretap Act. The Wiretap Act provides that it is illegal for a person to intentionally intercept a wire, oral, or electronic communication. The defendants argued that there was no “interception” because consent is a defense to a claim under the Wiretap Act and the plaintiffs voluntarily shared their credit card information. However, the District Court for the Northern District of Illinois denied the motion to dismiss the Wiretap Act claim, in part because even if the plaintiffs had consented, consent does not bar liability if the communication is intercepted for the purpose of committing a criminal or tortious act. Notably, the court also denied the defendants’ motion to compel arbitration because a browsewrap agreement containing an arbitration provision was not displayed prominently enough to put a customer on notice.

TIP:   Note that the recently enacted Restore Online Shoppers’ Confidence Act requires the clear and conspicuous disclosure of all material terms of the transaction before a third-party, post-transaction seller can charge a consumer for goods or services sold online.