Q&A on Mastercard's New Merchant Requirements

Vermont Updates Automatic Renewal Online Cancellation Provisions

Lisa B. Dubrow, Esq. explains new updates to Vermont’s Automatic Renewal Online Cancellation Provisions which goes into effect on July 1, 2020.

On March 5, 2020, Governor Phil Scott signed Vermont Senate Bill 110 into effect. This bill that was signed into law primarily tackles issues surrounding privacy, but also updates Vermont’s automatic renewal provisions to bring cancellation of consumer contracts in line with California’s current online cancelation requirements. The law goes into effect on July 1, 2020.

Automatic Renewal Online Cancellation Mechanism

The law expands Vermont’s automatic renewal law relating to consumer contracts with a minimum initial term of one year that renews for a subsequent term that is longer than one month which now requires a specific opt-in for the automatic renewal. Once this new law becomes effective sellers must now provide consumers with a toll-free telephone number, e-mail address, a postal address if the seller directly bills the consumer, or “another cost-effective, timely, and easy-to-use mechanism for canceling the contract.” Importantly, like California, if the consumer accepted the one-year initial-term automatic renewal contract online, then the seller must permit the consumer to terminate the contract “exclusively online.” 

Takeaway: As previously reported, this seems to be a more common trend. If you have not already, be sure to examine your automatic renewal programs and cancellation procedures to ensure compliance with this law and others.

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