AB 613, as introduced, Chu. Automatic renewals: cancellations: notice to consumers.
Existing law makes it unlawful for any business making an automatic renewal or continuous service offer to a consumer in this state to, among other things, fail to present the automatic renewal or continuous service offer terms in a clear and conspicuous manner.
This bill would require the cancellation policy in any automatically renewed contract under these provisions to include the right of the consumer to cancel for any reason upon 30 days’ written notice to the business and also include a statement describing the procedure to cancel the contact. The bill would permit the company to charge a cancellation fee, not to exceed 3 months’ charges, for a cancellation within the contract term.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 17602 of the Business and Professions
2Code is amended to read:
(a) It shall be unlawful for any business making an
2automatic renewal or continuous service offer to a consumer in
3this state to do any of the following:
4(1) Fail to present the automatic renewal offer terms or
5continuous service offer terms in a clear and conspicuous manner
6before the subscription or purchasing agreement is fulfilled and
7in visual proximity, or in the case of an offer conveyed by voice,
8in temporal proximity, to the request for consent to the offer.
9(2) Charge the consumer’s credit or debit card or the consumer’s
10account with a third party for an automatic renewal or continuous
11service without first obtaining the consumer’s affirmative consent
12to the agreement containing the automatic
renewal offer terms or
13continuous service offer terms.
14(3) begin insert(A)end insertbegin insert end insertFail to provide an acknowledgment that includes the
15automatic renewal or continuous service offer terms, cancellation
16policy, and information regarding how to cancel in a manner that
17is capable of being retained by the consumer. If the offer includes
18a free trial, the business shall also disclose in the acknowledgment
19how to cancel and allow the consumer to cancel before the
20consumer pays for the goods or services.
21(B) The cancellation policy shall include a consumer’s right to
22cancel, regardless of reason and include a statement informing
23the consumer of the procedure to cancel the contract. The
24cancellation
shall be given in writing to a business 30 days before
25the date that the consumer would like the contract to end. A
26cancellation fee, not to exceed three months’ charges, may be
27charged to a consumer who cancels before the term of the contract.
28(b) A business making automatic renewal or continuous service
29offers shall provide a toll-free telephone number, electronic mail
30address, a postal address only when the seller directly bills the
31consumer, or another cost-effective, timely, and easy-to-use
32mechanism for cancellation that shall be described in the
33acknowledgment specified in paragraph (3) of subdivision (a).
34(c) In the case of a material change in the terms of the automatic
35renewal or continuous service offer that has been accepted by a
36consumer in this state, the business shall provide the consumer
37with a clear and conspicuous notice of the material
change and
38provide information regarding how to cancel in a manner that is
39capable of being retained by the consumer.
P3 1(d) The requirements of this article shall apply only prior to the
2completion of the initial order for the automatic renewal or
3continuous service, except as follows:
4(1) The requirement in paragraph (3) of subdivision (a) may be
5fulfilled after completion of the initial order.
6(2) The requirement in subdivision (c) shall be fulfilled prior
7to implementation of the material change.
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