Bill > A3766

Introduced Session

This bill imposes certain requirements on businesses that make automatic renewal or continuous service offers. Under the bill, every business that makes an automatic renewal offer or continuous service offer to a consumer in this State is required to: 1) present the automatic renewal or continuous service offer terms in a clear and conspicuous manner before the subscription or purchasing agreement is fulfilled and in visual proximity or temporal proximity to the request for consent. If the offer includes a free gift or trial, the offer is required to include a clear and conspicuous explanation of the price that will be charged after the trial ends or the manner in which the subscription or purchasing agreement pricing will change upon conclusion of the trial; 2) obtain the consumer's affirmative consent to the agreement containing the automatic renewal or continuous service offer terms, including the terms of an offer that is made at a promotional or discounted price for a limited period of time, prior to charging the consumer for an automatic renewal or continuous service; and 3) provide an acknowledgement that includes the automatic renewal or continuous service offer terms, cancellation policy, and information regarding how to cancel. If the automatic renewal or continuous service offer includes a free gift or trial, the business is required to disclose in the acknowledgement how to cancel, and allow the consumer to cancel, the automatic renewal or continuous service before the consumer pays for the goods or services. This requirement may be fulfilled after the completion of the initial order. In addition, the bill requires a business that makes an automatic renewal or continuous service offer to provide a toll-free telephone number, electronic mail address, postal address if the seller directly bills the consumer, or another cost-effective, timely, and easy-to-use mechanism for cancellation. In addition, a consumer who accepts an automatic renewal or continuous service offer online is required to be allowed to terminate the automatic renewal or continuous service exclusively online. Further, under the bill, if there is a material change in the terms of the automatic renewal or continuous service that has previously been accepted by the consumer, the business is required to provide the consumer with clear and conspicuous notice of the material change and information regarding how to cancel the automatic renewal or continuous service prior to implementing the change. The bill also provides that in any case where a business sends any goods, wares, merchandise, or products to a consumer under an automatic renewal or continuous service agreement without first obtaining the consumer's affirmative consent, the goods, wares, merchandise, or products are to be deemed an unconditional gift to the consumer. The consumer may dispose of the goods, wares, merchandise, or products in any manner without any obligation to the business. If the consumer has been charged for the goods, wares, merchandise, or products, the business is required to provide a full refund to the consumer within 30 days of the request for a refund by the consumer. A violation of the bill's provisions is an unlawful practice under the consumer fraud act. An unlawful practice under the consumer fraud act is punishable by a monetary penalty of not more than $10,000 for a first offense and not more than $20,000 for any subsequent offense. In addition, violations may result in cease and desist orders issued by the Attorney General, the assessment of punitive damages, and the awarding of treble damages and costs to the injured party. Under the bill, "automatic renewal" is defined as a plan or arrangement in which a paid subscription or purchasing agreement is automatically renewed at the end of a definite term for a subsequent term. In addition, "continuous service" means a plan or arrangement in which a subscription or purchasing agreement continues until the consumer cancels the service.

Committee Categories

Roy Freiman (D)*,  William Sampson (D)*, 

Introduced, Referred to Assembly Consumer Affairs Committee (on 02/22/2024)

Official Document