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Bradley/Grombacher gives a voice to those injured by big insurance, pharmaceutical and Fortune 500 companies and works tirelessly to vindicate the rights of our clients who have been wronged.

What Consumers Need to Know About California’s Automatic Renewal Law

Companies offer free trials and discounts all the time, but sometimes consumers find themselves signed up and paying for a service or subscription they don’t want or need. Other consumers are completely unaware they’ve been signed up for a service until they discover a charge in their bank account or credit card statements.

If you are a California resident in this situation, California’s Automatic Renewal Law can help protect you from deceptive auto-renewal practices by companies.

Automatic renewal is defined as any agreement, including an agreement to purchase goods or services or a subscription, that is automatically renewed until cancelled by the consumer. Many automatic renewal agreements are used by companies online, but they can also occur over the phone, by paper or in-person.

Auto Renewal Requirements in California

California business laws require companies to meet several requirements before they can auto-renew and charge a customer’s account.

First, companies must clearly and conspicuously disclose their automatic renewal policy to consumers. No details can be in fine print or obscured by confusing language. Additionally, there must also be instructions about how to cancel the service available to the consumer.

Companies must also get affirmative consent from consumers before charging their debit or credit card or any bank account. This must occur before consumers are charged under the automatic renewal policy.

Customers who are presented with an offer to automatically renew with a company must also be presented with the following information under California’s Automatic Renewal Law:

  • How long the automatic renewal term will last if the customer does not cancel
  • The cancellation policy
  • Any minimum purchase obligations
  • A statement indicating that the customer must cancel the auto renewal or it will remain active and continue to charge the customer’s account

Lawsuits Under California’s Automatic Renewal Law

The California legislature enacted California’s Automatic Renewal Law in response to reports that numerous magazine and music companies were charging unknowing consumers under misleading auto-renew policies. A number of those companies have been successfully sued by consumers who claimed they were duped out of money under California’s Automatic Renewal Law.

Class action lawsuits have also been used to hold companies responsible for unfair automatic renewals; however, many businesses are still unaware of California’s Automatic Renewal Law.

Companies often neglect their obligations under the law and trick consumers into signing up for goods and services under an automatic renewal policy.

It is important for consumers to protect themselves and hold companies responsible for violating their rights under California’s Automatic Renewal Law.

Consumers who think they have been duped into an automatic renewal agreement by a company in California should collect all the information they can about the situation. This includes documentation from when you signed up with the company and proof that your bank account or credit card was charged by the company for an automatic renewal.

If you believe you have been unfairly charged by a company using automatic renewal, you may want to consider contacting an experienced attorney.

The consumer protection attorneys at Bradley/Grombacher have years of experience helping consumers hold companies of all sizes accountable for misconduct. Obtain a FREE case evaluation by filling out the form on this page now.

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