Bill Text: CA AB613 | 2015-2016 | Regular Session | Amended

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Bill Title: Automatic renewals: cancellations: notice to consumers.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Failed) 2016-02-01 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB613 Detail]

Download: California-2015-AB613-Amended.html

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BILL NUMBER: AB 613	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 6, 2015

INTRODUCED BY   Assembly Member Chu

                        FEBRUARY 24, 2015

   An act to amend Section 17602 of the Business and Professions
Code, relating to business.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 613, as amended, Chu. Automatic renewals: cancellations: notice
to consumers.
   Existing law makes it unlawful for any business making an
automatic renewal or continuous service offer to a consumer in this
state to, among other things, fail to present the automatic renewal
or continuous service offer terms in a clear and conspicuous manner.
   This bill would require the cancellation policy  of a
personal, nonessential services contract, as defined,  in any
automatically renewed contract under these provisions to include the
right of the consumer to cancel for any reason upon 30 days' written
notice to the business and also include a statement describing the
procedure to cancel the contact. The bill would permit the company to
charge a cancellation fee, not to exceed 3 months' charges, for a
cancellation within the contract term.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 17602 of the Business and Professions Code is
amended to read:
   17602.  (a) It shall be unlawful for any business making an
automatic renewal or continuous service offer to a consumer in this
state to do any of the following:
   (1) Fail to present the automatic renewal offer terms or
continuous service offer terms in a clear and conspicuous manner
before the subscription or purchasing agreement is fulfilled and in
visual proximity, or in the case of an offer conveyed by voice, in
temporal proximity, to the request for consent to the offer.
   (2) Charge the consumer's credit or debit card or the consumer's
account with a third party for an automatic renewal or continuous
service without first obtaining the consumer's affirmative consent to
the agreement containing the automatic renewal offer terms or
continuous service offer terms.
   (3) (A) Fail to provide an acknowledgment that includes the
automatic renewal or continuous service offer terms, cancellation
policy, and information regarding how to cancel in a manner that is
capable of being retained by the consumer. If the offer includes a
free trial, the business shall also disclose in the acknowledgment
how to cancel and allow the consumer to cancel before the consumer
pays for the goods or services.
   (B) The cancellation policy  of a personal, nonessential
services contract  shall include a consumer's right to cancel,
regardless of reason and include a statement informing the consumer
of the procedure to cancel the contract.  For the purposes of
this subparagraph, "personal, nonessential services contract" means a
fitness club contract, martial art school contract, gymnastics
facility contact, or dance school contract.  The cancellation
shall be given in writing to a business 30 days before the date that
the consumer would like the contract to end. A cancellation fee, not
to exceed three months' charges, may be charged to a consumer who
cancels before the term of the contract.
   (b) A business making automatic renewal or continuous service
offers shall provide a toll-free telephone number, 
electronic mail   email  address, a postal address
only when the seller directly bills the consumer, or another
cost-effective, timely, and easy-to-use mechanism for cancellation
that shall be described in the acknowledgment specified in paragraph
(3) of subdivision (a).
   (c) In the case of a material change in the terms of the automatic
renewal or continuous service offer that has been accepted by a
consumer in this state, the business shall provide the consumer with
a clear and conspicuous notice of the material change and provide
information regarding how to cancel in a manner that is capable of
being retained by the consumer.
   (d) The requirements of this article shall apply only prior to the
completion of the initial order for the automatic renewal or
continuous service, except as follows:
   (1) The requirement in paragraph (3) of subdivision (a) may be
fulfilled after completion of the initial order.
   (2) The requirement in subdivision (c) shall be fulfilled prior to
implementation of the material change.