Bill > HB5

This bill amends Alabama's service contract regulations to provide more comprehensive consumer protections and clarify definitions related to service contracts. The bill expands definitions of key terms like "consumer," "provider," and "service contract," and adds new requirements for service contract providers, including mandatory disclosures in advertising and contract language. Specifically, providers must now disclose in bold print any limitations on repairs, replacements, or refunds, and clearly outline procedures for contract holders to receive service. The bill requires providers to ensure financial stability through methods like reimbursement insurance policies, maintaining significant net worth, or establishing financial reserves. Service contract providers must now give consumers at least 10-20 days to return a contract for a full refund if no claims have been made, and must provide clear information about cancellation terms, transferability, and the scope of services covered. The bill also exempts certain types of contracts from full regulation, such as warranties, maintenance agreements, and service contracts for commercial transactions. The changes aim to increase transparency and protect consumers by ensuring service contract providers have the financial means to fulfill their obligations and provide clear, upfront information about contract terms. The bill will take effect on January 1, 2027.

Business and Industry

https://alison.legislature.state.al.us/bill-search