I would like to bring to your attention a bill pending in California regarding automatically renewing offers which has already passed unanimously in committee and is on its way to a to full house chamber vote.
California already requires full disclosure of the offer terms and an explanation of the full price that a consumer will be charged, or the manner in the which the pricing will be changed, upon conclusion of a trial or discounted offer. California also already required that a merchant provide online cancelation if the offer was accepted online.
However, this bill goes further. It would require that any business that that makes an automatic renewal offer or continuous service offer to a consumer in the state and that provides a free gift or trial or a promotional or discounted price for a limited period of time, must also provide the consumer with a notice 3 – 7 days’ before the first charge is made to the consumer’s account. That means during the promotional period a consumer would have to receive a notice providing them with a method of cancelation. That notice must not only explain how to cancel but if the notice is sent electronically (which it would be if the offer was made online), the notice must also include a link that directs the consumer to the cancellation process.
This notice and cancelation link is similar to the VISA regulations in effect as well as the law in effect in Washington D.C. for certain offers. It therefore seems to follow a trend.
[This requirement does not apply to a business if it charges the consumer on a consumption basis according to their usage of the goods or services (e.g. metro pass).]However, in addition to these new notice and cancelation link requirements, the proposed bill goes further and states that online offers must allow a consumer to terminate the automatic renewal or continuous service exclusively online,
- “at will and without engaging any further steps that impact or restrict the consumer’s ability to terminate the automatic renewal or continuous service immediately” AND
- The business must provide a “method of termination that is either on the internet website in the form of a direct link or button to cancel or by a termination email formatted and provided by the business that a consumer can send to the business without additional information.”
The proposed bill can be found here: http://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml?bill_id=201920200AB2811
If you have any questions reach out. I have been advised this is likely to pass. To date I do not know when it would become effective, but of course I will keep you posted.
