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New California law on auto-renewals?

by marciayudkin
4 replies
From Membership Site Insider:

On December 1st, a new California law went into effect that touches
every paid membership site, subscription site and online continuity
club in the US. This is just one of many regulations from the FTC,
the Federal Reserve and many US states that can get you in trouble
- especially now that Visa is saying they'll penalize or even shut
down sites' merchant accounts if you break any laws.
Anyone have any links or information on this new law?

Thanks,
Marcia Yudkin
#autorenewals #california #law
  • Profile picture of the author tpw
    I suspect that this is similar to the regulations put in place by the FTC earlier this year...

    There are plenty of existing threads to that end here on the forum.

    Have not heard anything about how the California law might change things, although I suspect it is simply legislation at the state level to reinforce what the Feds did through the FTC...
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    • Profile picture of the author kindsvater
      This refers to California Business and Professions Code Section 17600. The law can be read here: CA Codes (bpc:17600-17606)

      Essentially, before repeatedly charging someone's credit card month after month, you need to

      - clearly and conspicuously disclose the autorenewal terms,

      - disclose the cancellation policy,

      - have a way of being contacted,

      - give an 'acknowledgment' to the consumer with this information so they can keep it for their records.

      This is basic stuff that shouldn't affect anyone. It is directed at the shady merchants who try to bury recurring payment terms in the fine print.

      The law says it applies to anyone selling any goods or services to a California resident. But good luck to the State with that one in light of the Commerce Clause of the US Constitution.. If you're in New York offering a WSO with recurring payments to me in California, I'm confident California won't be coming after you.

      Note that anyone violating 17600 could have already be sued under California law for deceptive practices. But this clarifies and gives a roadmap to follow for not being deceptive in recurring billing terms.
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      • Profile picture of the author jan roos
        I think it's about time they do something about the ridicilous rebilling stuff thats going on especially these stupid little CPA stuff where you can't cancel your rebill because there is no way to get ahold of anyone and they make you jump through so many hoops etc.

        Unfortunately this ruins it for the legit marketers as well.

        Cheers
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  • Profile picture of the author Amy Carczak
    Real subscriptions will never be affected so
    simply make sure you're operating like a
    "real business" and treat the customer as
    you would like to be treated.
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