Legislative Analysis
Phone: (517) 373-8080
AUTOMATIC CONTRACT RENEWAL DISCLOSURE
http://www.house.mi.gov/hfa
House Bill 4843 as reported from committee Analysis available at
Sponsor: Rep. Abraham Aiyash http://www.legislature.mi.gov
Committee: Economic Development and Small Business
Complete to 12-10-24
SUMMARY:
House Bill 4843 would amend the Michigan Consumer Protection Act to require a clearly
marked cancellation option for contracts that renew automatically.
The bill would add section 3j to the act to provide that a person engaged in trade or commerce
that sells, leases, or offers to sell or lease a service or good to a consumer through a contract
with an automatic renewal provision would have to disclose the conditions of the automatic
renewal in a clear and conspicuous manner. The disclosure, which would have to be in at least
10-point type and included in the contract or offer, would have to include the following:
• A statement that the contract will automatically renew if the consumer agrees to the
contract.
• The length of the initial term of the contract and the amount to be charged to the
consumer for the initial term.
• The length of each renewal period under the contract and the amount to be charged for
any renewal period.
• The terms of any promotional or discounted limited-time price.
• A list and explanation of any terms of the contract that will change upon renewal.
• The specific procedure by which the consumer can cancel the contract at the end of the
initial term or a renewal period.
• An email, mailing address, toll-free telephone number, or other cost-effective, timely,
and easy-to use mechanism that the consumer may use to cancel the contract.
• If the contract or offer includes a gift or trial, a clear and conspicuous explanation of
the price that will be charged after the trial ends or any changes in price after the
conclusion of the gift or trial period, in addition to the specific procedure by which the
consumer can cancel the contract at the end of the gift or trial period.
Clear and conspicuous would mean written in a larger font type than the surrounding
text; written in contrasting type, font, or color to the surrounding text; or set off from
the surrounding text by symbols or other marks in a manner that clearly calls attention
to the disclosure.
Additionally, a provider could not automatically renew a contract for a period of longer than
two months without providing the consumer with a written or electronic notice before the end
of the contract term that includes the following information:
• A statement that the contract will automatically renew unless the consumer cancels it.
• A list and explanation of any terms of the contract that will change upon renewal.
• The specific procedure by which the consumer can cancel the contract.
• A mechanism for cancellation, as described above.
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 Consumers would have to be notified between 30 and 60 days of the last day that they could
give notice of their intent to cancel the contract, and they would have at least 30 days after
receiving the notice to cancel the contract at the end of any term. In addition to the methods of
cancellation provided above, a consumer who accepts a contract with an automatic renewal
provision would have to be able to cancel the contract exclusively online.
A timely cancellation would have to be honored, regardless of whether it is received after the
expiration of the notice period. An additional fee or other penalty could not be charged to
cancel a contract at the end of any term or at the end of a gift or trial period.
The bill would add a violation of these provisions to the list of unfair, unconscionable, or
deceptive methods, acts, or practices in the conduct of trade or commerce that are unlawful
under the Michigan Consumer Protection Act.
The bill would apply to a contract that takes effect or is extended, renewed, or modified after
its effective date, and any contract contrary to the bill’s provisions could be voided.
MCL 445.903 (amended) and 445.903j (proposed)
BACKGROUND:
In October of 2024, the Federal Trade Commission (FTC) issued a final rule requiring
businesses to provide simple mechanisms for consumers to immediately cancel subscriptions
and other recurring charges. 1 The rule will take effect January 14, 2025, and businesses have
until May 14, 2025, to comply.
MICHIGAN CONSUMER PROTECTION ACT
The Michigan Consumer Protection Act was enacted to protect consumers from deceptive
business practices such as price gouging or misrepresenting goods as new when they are used.2
Section 3 of the act states that unfair, unconscionable, or deceptive methods, acts, or practices
in the conduct of trade or commerce are unlawful and currently lists 37 activities that constitute
such a method, act, or practice. In addition, the act specifically prohibits certain actions (for
which a civil fine may be imposed) and imposes additional requirements on certain
transactions, such as vehicle rental transactions. However, as described below, the Michigan
Supreme Court has ruled that the act does not apply to individuals or businesses that are
regulated under state or federal law.
Remedies
A person who suffers a loss due to a violation of the Michigan Consumer Protection Act can
sue to recover $250 or actual damages, whichever is greater, along with reasonable attorney
fees. Any person can sue for a declaratory judgment that an act or practice is unlawful under
the act or for an injunction against someone engaging or about to engage in such conduct. In
addition, the attorney general or a prosecuting attorney can bring an action to permanently
enjoin a person from engaging in an unlawful act or practice, and a court may assess a fine of
1
https://www.ftc.gov/news-events/news/press-releases/2024/10/federal-trade-commission-announces-final-click-
cancel-rule-making-it-easier-consumers-end-recurring
2
For more information on the Michigan Consumer Protection Act, see:
https://www.house.mi.gov/hfa/PDF/FiscalSnapshot/GG_AttyGen_Michigan_Consumer_Protection_Act_Jan2023.p
df.
House Fiscal Agency HB 4843 as reported Page 2 of 3
 up to $25,000 if the conduct is found to be unlawful. The act also allows for a class action to
be brought under certain circumstances.
Applicability
Section 4(1)(a) of the Michigan Consumer Protection Act exempts a transaction or conduct
specifically authorized under laws administered by a regulatory board or officer acting under
state or federal law. The Michigan Supreme Court has held that this exemption applies when
“the general transaction is specifically authorized by law, regardless of whether the specific
misconduct alleged is prohibited.” 3 That is, rather than a business practice being exempt from
the act if it is specifically authorized by law, the court ruled that a practice whose legality under
the act is in dispute is exempt from the act if the general activity being engaged in is authorized
and regulated under law. For example, if a business is an industry regulated under a state or
federal law and the transaction or conduct alleged to be deceptive is within the regulatory
scheme of that industry, the exemption under section 4(1)(a) would likely apply and a person
could not—under the Michigan Consumer Protection Act—sue for damages or petition to have
the business stop engaging in the conduct alleged to be deceptive.
FISCAL IMPACT:
The bill would likely have no fiscal impact to the state or to local units of government.
The Department of Attorney General (AG) is responsible for enforcement of the Michigan
Consumer Protection Act. The department may experience an increase of cases related to the
bill to the extent that it takes civil action on behalf of consumers against any businesses that
violate the provisions in the bill.
The AG would likely be able to absorb any increased caseload resulting from the bill with
ongoing staff and funding. If existing AG staff is insufficient to comply with the bill, additional
state costs of approximately $100,000 annually for any additional support staff FTE position
and $200,000 annually for any additional attorney FTE position may be required.
POSITIONS:
The Department of Attorney General indicated support for the bill. (12-10-24)
The following entities indicated opposition to the bill:
• General Motors (10-3-23)
• Grand Rapids Chamber (12-10-24)
• Michigan Fitness Club Association (10-3-23)
Legislative Analyst: Holly Kuhn
Fiscal Analyst: Michael Cnossen
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations and does not constitute an official statement of legislative intent.
3
Smith v Globe Life Insurance Company, 460 Mich 446 (1999). The court affirmed Smith in Liss v Lewiston-Richards,
Inc, 478 Mich 203 (2007).
House Fiscal Agency HB 4843 as reported Page 3 of 3


Statutes affected:
Substitute (H-4): 445.903
Substitute (H-5): 445.903
House Introduced Bill: 445.903
As Passed by the House: 445.903