New California Law on Automatic Renewal Agreements

Effective July 1, 2018, California updated its law regulating the use of automatic renewals for the purchase of goods or services.  (Cal. Business & Professions Code §§ 17600 et seq.)  Existing law requires that businesses obtain a consumer’s affirmative consent to automatic renewals but only after disclosing the terms of the offer in a clear and conspicuous manner and provide an easy-to-use mechanism for cancellation.  In addition, the business must provide an acknowledgment that includes the automatic renewal terms and cancellation information.

This bill augments existing provisions by also requiring that:

  1. Free/Discounted Offers
    For promotional free or discounted trial offers, the offer shall include a clear and conspicuous explanation of the price that will be charged after the trial ends or the manner in which the subscription or purchasing agreement pricing will change upon conclusion of the trial.
  2. Online Cancellations
    A consumer who accepts an automatic renewal offer online is now permitted to terminate the offer online.