The proposed bill aims to strengthen consumer protections related to indefinite subscription agreements and contracts with automatic renewal clauses. It introduces definitions for key terms such as "indefinite subscription agreement," "automatic renewal," and "continuous service," while establishing consumer rights to cancel or unilaterally terminate memberships. Sellers are required to provide clear notice of cancellation rights and must accept cancellation notices through various methods, including in-person, by phone, or electronically. The bill prohibits sellers from imposing termination fees and mandates notification of any material changes to agreement terms. Additionally, it amends existing statutes to ensure consumers receive a copy of their contracts at signing, which must include cancellation and termination rights in boldface type, and it emphasizes that these rights cannot be waived.
The bill also includes specific amendments, such as stipulating that a consumer's termination notice must take effect within 31 days unless a future termination date is specified, while clarifying that sellers are not obligated to offer a future termination option. If sellers fail to provide necessary confirmations or notices, consumers can terminate their agreements at no cost. Furthermore, any goods sent under an indefinite subscription agreement without the consumer's affirmative consent are defined as unconditional gifts. The bill repeals certain provisions that may limit consumer rights, including a previous statute regarding alternative cancellation notices, and establishes an effective date of August 1, 2025, for contracts entered into, modified, or renewed thereafter.
Statutes affected: 1st Engrossment: 325G.24, 325G.25