New York has enacted a new auto-renewal law that affects sales to consumers (not b2b) that will go into effect in 90 days. This new law covers sales to consumers of auto-renewing or continuous service offers.
Read the full NY Senate Bill: NY S1475A
The new law does not really change much if you are currently complying with other federal and state laws but does now require that if a consumer signs up for any auto-renewing or continuous service plan online, the merchant must provide an easy mechanism to enable the consumer to also cancel online (this mirrors current CA law and other laws and card issuer regulations under more limited circumstances).
As with other state and federal laws, for an automatic renewal or continuous service offer made to a consumer to be valid the merchant must clearly and conspicuously disclose:
• that the subscription or purchasing agreement will continue until the consumer cancels;
• the description of the cancellation policy that applies to the offer;
• the recurring charges that will be charged and that the amount of the charge may change, if that is the case (and the amount to which the charge will change, if known);
• the length of the automatic renewal term or that the service is continuous, unless the length of the term is chosen by the consumer; and
• the minimum purchase obligation, if any.
If the offer includes a trial, the merchant must also include an explanation of the price that will be charged after the trial ends or the manner in which the pricing will change upon conclusion of the trial.
Similar to CA law, the consumer must receive an acknowledgment after the sale that includes the automatic renewal or continuous service offer terms, cancellation policy, and information regarding how to cancel in a manner that is capable of being retained by the consumer.
As stated above, if the consumer accepts an automatic renewal or continuous service offer online there must be a way to also easily cancel online.
If there are any material changes to the offer (e.g., increase in a renewal price), a consumer must receive a notice enabling them to cancel.
There is no private right of action for a violation of this law and enforcement is addressed by the NY AG who can enjoin and impose civil penalties.
Although this NY law does not change the landscape if you are already complying with all other state laws it should remind merchants of the risks involved in failing to comply with those laws, not to mention card issuer regulations. If you need any assistance to ensure your company’s compliance with state or federal laws or regulations feel free to reach out.