California already has one of the strictest and most detailed auto-renew laws in the country, providing the model for other states, like New York, and effectively setting the standard for national subscription programs (as is California's wont). Now, Governor Newsom has signed into law amendments to the statute that impose even stricter requirements, as follows:
- Free Trial Notice: if the auto-renew program offer includes a free or discounted trial period of 31 days or more, the business must provide notice between 3 and 21 days before the expiration of the trial period that reminds the consumer of the terms of the subscription, that it will auto-renew, and how to cancel it. An electronic method of cancellation must be provided, along with contact information for the business. (If the consumer did not sign up electronically and the business did not collect the consumer's email address, phone number, or other contact info that would allow the business to notify the consumer electronically, then this notice is not required.)
- Annual Contract Notice: if the consumer signs up for an auto-renewing subscription of one year or longer, then the business must provide notice to the consumer between 15 and 45 days before the renewal, with all the same information as for (1) above and with an electronic cancellation method.
- Cancellation Method: as noted above, and as existing law requires, if consumers can sign up for a subscription online, they must be allowed to cancel online. The new law imposes more granular requirements for this online cancellation functionality, namely it must be provided via a prominently located direct link or button which may be located within either a customer account or profile, or within either device or user settings; or via an immediately accessible termination email formatted and provided by the business that a consumer can send to the business without additional information. Further, these methods must allow the consumer to terminate "at will, and without engaging any further steps that obstruct or delay the consumer's ability to terminate the automatic renewal or continuous service immediately." In other words, make it easy and make it fast (however, the statute provides that it's okay to require the consumer to authenticate her account info before terminating, so long as termination is available through offline means if the consumer cannot or will not authenticate).
As before, the new statute requires businesses to clearly and conspicuously provide detailed information to consumers about the terms of the subscription (including how to cancel) and must obtain consumers' affirmative consent.
The revised law effectively replaces the old one and goes into effect on July 1, 2022.
This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.