The bill, S.B. No. 838, introduces Chapter 611 to the Business & Commerce Code, establishing regulations for subscription service contracts in Texas. It defines key terms such as "automatic renewal clause," "consumer," "service provider," and "subscription service." The chapter mandates that service providers must clearly disclose the nature of the contract and the cancellation procedure at the time of agreement. Additionally, if a contract has a term of 12 months or more with an automatic renewal, the provider must give the consumer written notice of the renewal and cancellation procedure within specified timeframes. The bill also outlines multiple methods for consumers to cancel their subscriptions, including online, by mail, or via telephone.

Furthermore, the bill establishes that violations of these regulations are considered deceptive trade practices, allowing the attorney general to impose civil penalties of up to $2,000 for each month a violation continues. It also requires the attorney general to provide written notice to service providers of any alleged violations before taking action. The bill clarifies that it does not create a private cause of action for consumers and that it does not relieve consumers of their obligations under existing contracts. The provisions of this chapter will apply only to contracts entered into or renewed after the effective date of the Act, which is set for September 1, 2025.

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