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California Automatic Renewal Law

Business and Professional Code Section 17600-17606


17600     It is the intent of the Legislature to end the practice of ongoing charging of consumer credit or debit cards or third party payment accounts
 without the consumers' explicit consent for ongoing shipments of a product or ongoing deliveries of service.

17601     For the purposes of this article,the following definitions shall apply:

(a)  "Automatic renewal"     means a plan or arrangement in which a  paid subscription or purchasing agreement is automatically renewed at  the end of a definite term for a subsequent term.

(b)  "Automatic renewal offer terms"     means the following CLEAR AND CONSPICUOUS DISCLOSURES

(1)  That the subscription or purchasing agreement will continue until the consumer cancels.

(2)  The description of the cancellation policy that applies to the offer.

(3)  The recurring charges that will be charged to the consumer's  credit or debit card or payment account with a third party as
part of  the automatic renewal plan or arrangement, and that the amount of  the charge may change, if that is the case, and the amount to which  the charge will change, if known.

(4)  The length of the automatic renewal term or that the service is continuous, unless the length of the term is chosen by the consumer.

(5)  The minimum purchase obligation, if any.

(c)  "CLEAR AND CONSPICUOUS"  or  "CLEARLY AND CONSPICUOUSLY"  means  in larger type than than  the surrounding
text, or in contrasting type,  font, or color to the surrounding text of the same size, or set off  from the surrounding text of the same size by symbols or other marks,  in a manner that clearly calls attention to the language.  In the  case of an audio disclosure, "CLEAR AND CONSPICUOUS and "CLEARLY AND CONSPICUOUSLY"   means in a volume and cadence sufficient to be  readily audible and understandable.

(d)  "Consumer"   means any individual who seeks or acquires, by  purchase or lease, any goods, services, money or credit for  personal,
family or household purposes. 

(e)  "Continuous service"   means a plan or arrangement in which a  subscription or purchasing agreement continues until the consumer
 cancels the service.

17602
(a)  IT SHALL BE UNLAWFUL  for any business MAKING AN AUTOMATIC RENEWAL OR CONTINUOUS SERVICE
 OFFER  to a consumer in this  state TO DO ANY OF THE FOLLOWING:

(1)  FAIL TO PRESENT the automatic renewal offer in terms or continuous service offer terms IN A CLEAR AND
CONSPICUOUS MANNER before the subscription or purchasing agreement is fulfilled and in  VISUAL PROXIMITY, or in the case of an offer conveyed by voice, in  temporal proximity, TO THE REQUEST FOR CONSENT TO THE OFFER

(2)  CHARGE THE CONSUMER'S CREDIT OR DEBIT CARD or the consumer's account with a third party for an
 automatic renewal or continuous  service WITHOUT FIRST OBTAINING THE CONSUMER'S AFFIRMATIVE CONSENT  TO THE AGREEMENT containing the automatic renewal offer terms or  continuous service offer terms.

(3)  FAIL TO PROVIDE an acknowledgement that includes the automatic  renewal or continuous service offer terms, cancellation
policy and  INFORMATION REGARDING HOW TO CANCEL in a manner that is capable of  being retained by the consumer.  If the offer includes a free trial, the business shall also disclose in the acknowledgement   HOW TO CANCEL and ALLOW THE CONSUMER TO CANCEL BEFORE THE CONSUMER PAYS FOR THE GOODS OR SERVICES.

(b)  A business making automatic renewal or continuous service  offers shall provide a toll-free  telephone number, electronic mail
address,   a postal address only when the seller directly bills the consumer, or another cost-effective, timely, and   EASY-TO-USE  MECHANISM FOR CANCELLATION  that shall be described in the  acknowledgement specified in paragraph (3) of subdivision (a).

(c)  In the case of a material change in the terms of the automatic  renewal or continuous service offer that has been accepted by a
 consumer in this state, the BUSINESS SHALL PROVIDE THE CONSUMER WITH  A CLEAR AND CONSPICUOUS NOTICE OF THE MATERIAL CHANGE  AND PROVIDE INFORMATION REGARDING HOW TO CANCEL  in a manner that is capable  of being retained by the consumer.

(d)  The requirements of this article shall apply only prior to the completion of the initial order for the automatic renewal or continuous
service, except as follows:

(1)  The requirement in paragraph (3) of sub-division (a) may be fulfilled after completion of the initial order.

(2)  The requirement in sub-division (c) shall be fulfilled prior to implementation of the material change.

17603

In any case in which a business sends any goods, wares, merchandise or products to a consumer, under a continuous service agreement or automatic renewal of a purchase, WITHOUT FIRST OBTAINING THE CONSUMER'S AFFIRMATIVE CONSENT as described in Section 17602, THE GOODS, WARES, MERCHANDISE OR PRODUCTS SHALL FOR ALL PURPOSES BE DEEMED AN UNCONDITIONAL GIFT TO THE CONSUMER, who may use or dispose of the same in any manner he or she sees fit without any obligation whatsoever on the consumer's part to the business, including, but not limited to,  bearing the cost of, or responsibility for, shipping any goods, wares, merchandise or products to the business.

17604

(a)  Notwithstanding Section 17534, a violation of this article shall not be a crime.  However, all available civil remedies that apply
 to the violation of this article may be  employed.

(b)  If a business complies with the provisions of this article in good faith, it shall not be subject to civil remedies.

17605

The following are exempt from this requirements of this article:

(a)  Any service provided by a business or its affiliate where  either the business or its affiliate is doing business pursuant to a  franchise
issued by a political subdivision of the state or a   license, franchise, certificate, or other authorization issued by the California Public Utilities Commission (CPUC). 

(b)  Any service provided by a business or its affiliate where either the business or its affiliate is regulated by the CPUC, the Federal
Communications Commission, or the Federal Energy Regulatory Commission.

(c)  Any entity regulated by the Department of Insurance

(d)  Alarm company operators, as defined in Section 7590.2 and regulated pursuant to Chapter 11.6 (commencing with Section 7590)
of Division 3.

(e)  A bank, bank holding company, or the subsidiary or affiliate of either, or a credit union or other financial institution, licensed under
 state or federal law.

(f)  Service contract sellers and service contract administrators regulated by the Bureau of Electronic and Appliance Repair pursuant to
Article 4.5 (commencing with Section 9855) of Chapter 20 of Division 3. 

17606   This article shall become operative on December 1, 2010.


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