The practice of auto-renewal is becoming more popular with all kinds of subscription services, but it’s now caught the attention of consumer advocates and legislators. Many have been contacted by consumers who are finding these practices in less-common places and all without an auto-renewal notice.
Whether it’s internet software, a subscription box for products, or your gym, these auto-renewal practices are prompting thousands of consumer complaints. In addition to the managers of these programs making it difficult to spot the auto-renewal notice when the customer first signs up, many of these subscriptions make the fine print about how to cancel difficult to find. In the interim, a consumer might be charged multiple times even though they didn’t want the product.
More states than ever are considering or enacting legislation that makes such an auto-renewal notice mandatory in addition to full disclosures about how to cancel. Many of these pieces of legislation require that the company gets the consumer’s consent upfront before processing the first payment
As of now, 22 states already have laws on the books about how companies must warn consumers about auto-renewal. Furthermore, eight new states this year introduced legislation. The majority of consumer contracts are covered by laws in some locations like Oregon and California. Those states require that companies enable customers to cancel easily. Other states restrict a mandatory auto-renewal notice to only certain kinds of businesses, such as a home security company.
The consumer advocates pushing for greater protections believe that since the practice is becoming popular with many different kinds of companies that too many consumers now face the risk of getting stuck with ongoing agreements they don’t want. The businesses who oppose these rules do so on the grounds that some consumers in certain industries want auto-renewal to be simple so they can sign up once and forget about it. Companies that do business in multiple states also argue that requirements differing from one state to another can be very hard for compliance purposes.
Consumer advocates respond to these issues by sharing that while some customers want the ease of contracts renewing on their own, in too many cases the verbiage about auto-renewal is too difficult to find and cancel. By the time the charge shows up on their bank or credit card statement, it may be too late to cancel or another billing cycle may have started already. This then requires the consumer to dig through the fine print of their sign-up information to identify how to cancel. Other people are attracted to a free trial offer, only to find out after their card has been charged that the money is gone from their account. Advocates believe these policies are designed to get as much money from consumers as possible by making it hard to cancel.
Do you think that you may have grounds for an auto-renewal notice lawsuit because a company has violated your state’s laws? If so, the lawyers at Bradley/Grombacher want to hear from you.