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Oregon Automatic Contract Renewal Law

Chapter 509

Relating to unlawful consumer charging practices; creating new provisions; and amending ORS 646.608

Be It Enacted by the People of the State of Oregon:

SECTION 1
It is the intent of the Legislative Assembly 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 services.

SECTION 2
As used in this section and section 3 of this 2011 Act:

(1)  "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.

(2)  "CLEAR AND CONSPICUOUS"       means in larger type 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" means in a volume and cadence sufficient to be readily audible and understandable.

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

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

(5)  "Offer terms"  means the following clear and conspicuous disclosures:

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

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

(c)  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 or continuous service plan or arrangement, and, if the amount of the  charge will change, the amount to which the  charge will change, if known.

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

(e)  The minimum purchase obligation, if any.

(6)  "Person   has the meaning given that term in ORS 646-605.

SECTION 3

(1)  It is unlawful for a person that makes an AUTOMATIC RENEWAL OR CONTINUOUS SERVICE OFFER to the consumer
in this state to do any of the following:

(a)  Fail to present the automatic renewal  offer terms or continuous service offer terms in  a CLEAR AND CONSPICUOUS
MANNER before a 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.

(b)  Charge the consumer's credit or debit  card or payment 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.

(c)  FAIL TO PROVIDE an acknowledgement that  includes the automatic renewal offer terms or  continuous service offer,
 terms 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 person shall also  disclose in the acknowledgement HOW TO CANCEL   and   ALLOW THE CONSUMER TO CANCEL BEFORE THE  CONSUMER PAYS FOR THE GOODS OR SERVICES.

(2)  A person making automatic renewal or  continuous service offers shall provide a toll-free telephone number, electronic mail address,
  a post-office address only when the person directly bills the consumer, or another cost-effective,  timely and EASY-TO-USE MECHANISM FOR CANCELLATION that must be described in the acknowledgement required by subsection (1)(c) of  this section.

(3)  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, the person 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.

(4)  The requirements of this section  MUST BE MET PRIOR TO THE COMPLETION OF THE INITIAL ORDER  for the automatic
renewal or continuous service, except as follows:

(a)  The requirement in subsection (1)(c) of this section may be fulfilled after completion of the initial order.

(b)  The requirement in subsection (3) of this section must be fulfilled prior to  implementation of the material change.

(c)  The requirements in subsection (1)(a) and (c) of this section may be fulfilled in the initial billing statement or invoice provided
to the consumer when the person directly bills the consumer.

(5)  In the event a person sends goods, wares, merchandise or products to a consumer under a continuous service agreement or pursuant
to  an automatic renewal of the purchase  WITHOUT FIRST OBTAINING THE CONSUMER'S  AFFIRMATIVE CONSENT   as required in subsection (1) of this section,  the goods, wares, merchandise or products shall  for all purposes be deemed an UNCONDITIONAL GIFT  TO THE CONSUMER who may use or dispose of  them in any manner the consumer sees fit  without any obligation to the person including,  but not limited to, requiring the consumer to  ship, or bear the cost of shipping, any goods,  wares, merchandise or products to the person.

(6)  The following are exempt from the requirements of this section:

(a)  A person that provides a  service pursuant  to a franchise issued by a political subdivision  of the state or a license, franchise,  certificate  or other authorization issued by the  Public Utility Commission of Oregon.

(b)  A person that provides a service regulated by the Public Utility Commission of Oregon, the Federal Communications Commission or the Federal Energy Regulatory Commission.

(c)  A person regulated by the Department of Consumer and Business Services under the Insurance Code.

(d)  A bank, bank holding company, or the subsidiary or affiliate of either, or a credit union or other financial institution or trust company as those terms are defined in ORS 706.008, that is licensed under state or federal law.

(e)  A person that is regulated as a service contract seller under ORS 646A.150 to 646A.172.

(f)  A consumer finance company licensed under ORS chapter 725.

(g)  A person that provides direct-to-home satellite services subject to regulation by the Federal Communications Commission.

SECTION 5
Sections 2 and 3 of this 2011 Act and the amendments to ORS 646.608 by section 4 and of this 2011 Act apply to automatic renewal and continuous service offers entered into on or after the effective date of this 2011 Act.

Approved by the Governor June 23, 2011.
Filed in the office of Secretary of State June 23, 2011
Effective date January 1, 2012



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