Bill Text: CA SB313 | 2017-2018 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Advertising: automatic renewal and continuous service offers.

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Passed) 2017-09-28 - Chaptered by Secretary of State. Chapter 356, Statutes of 2017. [SB313 Detail]

Download: California-2017-SB313-Introduced.html

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CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill

No. 313

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Introduced by Senator Hertzberg

February 13, 2017

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

LEGISLATIVE COUNSEL'S DIGEST

SB 313, as introduced, Hertzberg. Advertising: automatic renewal and continuous service offers.

Existing law prohibits any business that makes an automatic renewal, as defined, or continuous service, as defined, offer to a consumer in this state from, among other things, failing to present the automatic renewal or continuous service offer terms in a clear and conspicuous manner, charging the consumer for an automatic renewal or continuous service without first obtaining the consumer’s affirmative consent, and failing 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, as specified. A violation of these provisions is subject to enforcement by any available civil remedies, except for specified activities exempt from these requirements.

This bill also would prohibit a business that makes an automatic renewal offer or continuous service offer that includes a free gift or trial, from failing to receive a consumer’s explicit authorization for the automatic renewal offer or continuous service offer separate from the consumer’s agreement to accept the free gift or trial. The bill would also prohibit a business from charging a consumer’s credit or debt card, or the consumer’s account with a 3rd party, for an automatic renewal offer or continuous service offer that is made at a promotional or discounted price for a limited period of time without first obtaining the consumer’s consent to the agreement. The bill would also specify that if the automatic service offer or continuous service offer includes a free gift or trial, the business is required to disclose how to cancel, and allow the consumer to cancel, the automatic renewal or continuous service before the consumer pays for the goods or services. The bill would also require a business to provide a consumer who has accepted an automatic renewal offer or continuous service offer 3 days’ notice before the first charge to the consumer’s credit or debit card, or the consumer’s account with a 3rd party, is made. The bill would also make other clarifying changes.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

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Bill Text

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 offer 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) For an automatic renewal offer or continuous service offer that includes a free gift or trial, fail to receive a consumer’s explicit authorization for the automatic renewal offer or continuous service offer separate from the consumer’s agreement to accept the free gift or trial.

(2)

(3) Charge the consumer’s credit or debit card card, or the consumer’s account with a third party party, for an automatic renewal offer or continuous service offer without first obtaining the consumer’s affirmative consent to the agreement containing the automatic renewal offer terms or continuous service offer terms. terms, including the terms of an automatic renewal offer or continuous service offer that is made at a promotional or discounted price for a limited period of time.

(3)

(4) Fail to provide an acknowledgment that includes the automatic renewal offer terms 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 automatic renewal offer or continuous service offer includes a free gift or trial, the business shall also disclose in the acknowledgment how to cancel cancel, and allow the consumer to cancel cancel, the automatic renewal or continuous service before the consumer pays for the goods or services.

(5) Fail to provide a consumer who has accepted an automatic renewal offer or continuous service offer three days’ notice before the first charge to the consumer’s credit or debit card, or the consumer’s account with a third party is made.

(b) A business making automatic renewal offers or continuous service offers shall provide a toll-free telephone number, electronic mail address, a postal address only when if the seller directly bills the consumer, or it shall provide another cost-effective, timely, and easy-to-use mechanism for cancellation in a manner that allows the consumer to cancel the service or offer as easily as the consumer accepted the service or offer that shall be described in the acknowledgment specified in paragraph (3) (4) of subdivision (a).

(c) In the case of a material change in the terms of the automatic renewal offer 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) (4) 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.