Vote Smart's Synopsis:

Vote on a bill that amends a variety of obligations for auto-renewing subscription contracts, and adds new obligations for companies that use them in California.

Highlights:

• Amends definitions in consumer law to include a provision of a contract containing those subscriptions or purchasing agreements and to include a plan, arrangement, or provision of a contract that contains a free-to-pay conversion (Sec. 1). 

• Defines “free-to-pay conversion” to mean, in an offer or agreement to sell or provide any goods or services, a provision under which a customer receives a product or service for free for an initial period and will incur an obligation to pay for the product or service if they do not take affirmative action to cancel before the end of that period (Sec. 1). 

• Requires the business to obtain the consumer’s affirmative consent to the automatic renewal or continuous service separately from any other portion of the contract (Sec. 1). 

• Prohibit the business from including any information in the contract that undermines the ability of consumers to provide their affirmative consent, as specified (Sec. 1). 

• Require the business to maintain verification of the consumer’s affirmative consent for at least 3 years, or one year after the contract is terminated, whichever period is longer (Sec. 1). 

• Prohibits the misrepresentation of, or failure to disclose, material facts or terms related to the transaction, as provided. 

• Requires the business to send the consumer an annual reminder that discloses, as specified, the product or service to which the automatic renewal or continuous service applies, the frequency and amount of the associated charges, and the means to cancel the service (Sec. 1). 

• Requires the ability to cancel or terminate to be available in the same medium that the consumer used in the transaction that resulted in the activation of the automatic renewal or continuous service, or the same medium in which the consumer is accustomed to interacting with the business, as specified (Sec. 1). 

• Specifies that it is not an unreasonable obstruction to provide a discount offer or other consumer benefit or to inform a consumer of the effect of the cancellation if the consumer remains able to cancel or terminate the automatic renewal or continuous service (Sec. 1). 

• Require,  including changes the consumer affirmatively consented to in an existing plan or arrangement, the business to provide a clear and conspicuous notice of the fee change and information regarding how to cancel in a specified manner no less than 7 days and no more than 30 days before the fee change takes effect (Sec. 1). 

• Require the business to provide the notice to the consumer before confirming the consumer’s billing information (Sec. 1). 

• Require the notice to include the amount or range of costs the consumer will be charged and, if applicable, the frequency of those charges a consumer will incur unless the consumer takes timely steps to prevent or stop those charges (Sec. 1).

Full Bill Text