In anticipation of changes to California’s automatic renewal law (ARL) becoming effective next month, Vermont has now become the first state to require a “double opt-in” ARL.
The law applies to “consumer” contracts with an initial term of at least one year and that renew automatically for a subsequent term longer than one month. Disclosures must be in plain and unambiguous language, clear and conspicuous and in bold-face type. Consumers must affirmatively indicate assents to the automatic renewal component, separate from the contract itself. The two cannot be bundled.
The law applies to B2C and B2B contracts. It requires that consumers be provided with written or electronic notice of the automatic renewal to customers 30 to 60 days prior to the automatic renewal or subscription termination date.
The news comes on the heels of Vermont’s data broker legislation passed in May 2018.
Vermont House Bill 593 goes into effect July 1, 2019.
Violations of the new Vermont legislation’s will be considered a unfair and deceptive practice. .
Takeaway: Given the automatic renewal program-related legislative trends designed to ensure consumers are not subject to subscription services without express consenting, it is crucial that those that do business in such states or with consumers in such states, to ensure that their automatic renewal programs are compliant.
Contact the author at firstname.lastname@example.org or (212) 756-8777 with questions about Vermont House Bill 593, California’s ARL, ROSCA or other automatic renewal provision-related issues.
Richard B. Newman is an advertising compliance attorney at Hinch Newman LLP. Follow him on LinkedIn.
Informational purposes only. Not legal advice. Previous case results do not guarantee similar future result. Hinch Newman LLP | 40 Wall St., 35th Floor, New York, NY 10005 | (212) 756-8777.