The number of companies engaging in the practice of allowing automatic renewals is on the rise and businesses in California have to comply with an increasingly complex set of laws. Those businesses that fail to comply with the regulations of the state level to notify consumers about automatic renewals will have to deal with potential lawsuits or fines.
Recent Requirements for Automatic Renewals in California
California will now require online businesses that provide any type of free trial to tell consumers exactly how much that automatic renewal will cost should the consumer fail to cancel before the trial period. The new law was signed by the governor last Thursday and the author of the bill, known as SB 313, believes that it will become easier than ever for consumers to cancel services before they find unwanted charges on their bank or credit card account.
Online Companies Newest to Be Considered in Disclosure Mandates for Automatic Renewals
A broad range of different companies, including online services such as Dropbox, Spotify and Hulu have been named in consumer complaints and lawsuits about automatic renewals. The law in California goes into effect in July 2018.
Automatic renewals have become increasingly complex and the target of numerous consumer class action lawsuits as a result of the fact that consumers do not realize their opportunity to cancel the service or do not understand at the time that they are signing up for a service that they are agreeing to pay for automatic renewals.
How Automatic Renewals Often Confuse Consumers
In many of these cases, a free trial is offered as an opportunity for someone to give the service or product delivery a chance and then the consumer is surprised to find continuous renewal charges on their financial statements. Whether it’s a product or a service, it’s the consumer who may not have all the information they need to make an informed decision.
Another challenge that has emerged with the automatic renewals has to do with the fact that the companies often make it difficult to find the relevant information about how to cancel the service. Therefore, many consumers find themselves going round and round with representatives at the company attempting to figure out the most appropriate way to cancel the service.
They may, in the meantime, be charged additional renewal charges even though they have expressed an indication to cancel.
California continues to be a national leader in terms of studying these issues and putting together regulations and laws related to automatic renewals. As more consumers come forward with concerns, companies must remain aware of compliance-related steps they should take to make automatic renewals more clearly understood upfront in addition to easy to cancel.
Legal Help for Illegal Automatic Renewals
A number of different law firms have begun to represent California residents in these kinds of lawsuits. If you believe that you have been targeted by illegal automatic renewals in which the company failed to disclose the relevant information to you, you may be eligible to file a lawsuit with the help of the lawyers at Bradley/Grombacher. Do not hesitate to reach out to get help.
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