California Update: New Negative Option Law Effective Dec 1st

California Update

New Negative Option Law Effective Dec 1st

On December 1st, California’s negative option law went into force.  The law requires that for all negative option transactions (i.e., those that automatically renew unless cancelled), the merchant must provide a disclosure in type larger than the surrounding text detailing that:

(1) the subscription or purchasing agreement will continue until the consumer cancels; (2) a description of the cancellation policy; (3) recurring charges will be charged to the consumer’s credit card and the amount of the charge if known; (4) the length of the automatic renewal and (5) the minimum purchase obligation if any.  The merchant also must provide a toll-free telephone number, electronic mail address the consumer may use to cancel.  Any items sold without obtaining consent as required by the new law are deemed an unconditional gift.  Hmm, does Ferrari have a negative option program?