Washington D.C. is seeking to impose new burdens on businesses offering goods and services with automatic renewal provisions. The bill was submitted to the Mayor’s office, and we expect a response around January 14, 2019.
If passed, the bill would require businesses to disclose the automatic renewal provisions and cancellation procedure in contracts with consumers. If the automatic renewal term is 12 months or more and would automatically renew for a term of one month or more, businesses would further be required to notify consumers by mail or email of the automatic renewal provision. Such notice would need to be sent 30-60 days before the cancellation deadline, and contain certain required disclosures. Importantly, if the notice is provided by email, businesses would also need to include an active weblink to allow the consumer to cancel the automatic renewal.
The bill also places requirements on businesses offering free trials with automatic renewals, including notification of the automatic renewal before the expiration of the free trial period, and a requirement that the business obtain consent to the automatic renewal before charging the consumer.
TAKEAWAY: Automatic renewal provisions continue to be a hot topic for regulators and legislators. In addition to complying with the Restore Online Shoppers’ Confidence Act, advertisers should be aware of current and pending state law requirements, including California’s automatic renewal law and this proposed bill in Washington D.C.