The Transparency in Enforcement, Restricting, and Monitoring of Services Act, or TERMS Act, seeks to provide consumers and businesses with sufficient information about online service providers' standards and policies regarding account termination or suspension. The goal is to enable informed choices and foster a competitive marketplace by requiring greater transparency from providers of public-facing websites, online services, or applications that require user accounts.

Online service providers will be required to publicly disclose an acceptable use policy within 180 days of the Act's enactment. This policy must clearly explain prohibited acts, enforcement methods (including third-party involvement), appeal processes (or lack thereof), and whether off-platform conduct can lead to restrictions. Material changes to these policies must be communicated to users in advance.

Before restricting a user, providers must generally issue an advance written notice at least seven days prior, detailing the specific violation, how it breached the policy, and any appeal options. Exceptions to this notice requirement apply for court orders, federal law compliance, or to protect against imminent risks of death, serious injury, or health hazards. In such urgent cases, notice must be provided concurrently or as soon as practicable.

Furthermore, online service providers must publish an annual report detailing actions taken to enforce their acceptable use policies. This report must include:

The total number of potential violation alerts by source (e.g., user complaints, government entities).
The number of instances where users were restricted, categorized by the type of restriction (e.g., termination, suspension, limited access).
The exact policy provision violated and the source of the alert.
The number of user appeals and how many resulted in a reversal of the decision.

The Federal Trade Commission (FTC) is responsible for enforcing this Act, treating violations as unfair or deceptive acts or practices. The FTC will also issue guidance to help online service providers comply with these new requirements.