Changes to California Automatic Renewal Law Effective July 1, 2018

Wilson Sonsini Goodrich & Rosati
Contact

Wilson Sonsini Goodrich & Rosati

Companies that offer automatically renewing or continuing services to California consumers may have additional disclosure, consent, and cancellation-related obligations under an amendment to California's automatic renewal law that goes into effect on July 1, 2018.

Under existing California law, an automatic renewal offer is an agreement between a company and a consumer that automatically renews at the end of the term. A continuous service offer is an agreement between a company and a consumer that remains effective until the consumer cancels the service.1 The amendment, California Senate Bill No. 313 (SB 313), expands a service provider's obligations related to both automatic renewal and continuous service offers in several ways:

  • Online Cancellation. Existing law requires that the company provide a cost-effective, timely, and easy-to-use mechanism for cancellation. The revised law now requires that any automatic renewal or continuous service offer that is accepted online also must be cancellable online. As of July 1, companies that currently require consumers to cancel an automatic renewal or continuous service offers only by telephone or postal mail must offer an online cancellation option and inform consumers of that online cancellation option.
  • Pricing After a Trial Period. Existing law requires clear and conspicuous disclosure of the terms and prices of any automatic renewal or continuous service offer. Under the revised law, if a company's offer includes a free trial period or a trial period at a reduced or discounted price, the company now must include a clear and conspicuous explanation of the prices and terms that will be charged after the trial period ends and must obtain the consumer's affirmative consent to those prices and terms.
  • Cancellation After a Trial Period. Existing law requires companies to provide an acknowledgement that consumers can retain that discloses the offer terms, cancellation policy, and information about how to cancel. If the offer includes a free gift or trial, the revised law now requires that the acknowledgement include information on how to cancel before any payment is made (i.e., before the first payment is automatically charged).

1 Cal. Bus. & Prof. Code § 17600, et. seq.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Wilson Sonsini Goodrich & Rosati | Attorney Advertising

Written by:

Wilson Sonsini Goodrich & Rosati
Contact
more
less

Wilson Sonsini Goodrich & Rosati on:

Reporters on Deadline

Related Case Law

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.