Bill Text: TX HB2259 | 2021-2022 | 87th Legislature | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to requirements for subscription service contracts; providing a civil penalty.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced - Dead) 2021-05-05 - Committee report sent to Calendars [HB2259 Detail]
Download: Texas-2021-HB2259-Introduced.html
Bill Title: Relating to requirements for subscription service contracts; providing a civil penalty.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced - Dead) 2021-05-05 - Committee report sent to Calendars [HB2259 Detail]
Download: Texas-2021-HB2259-Introduced.html
87R4318 MLH-D | ||
By: Guerra | H.B. No. 2259 |
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relating to requirements for subscription service contracts. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Title 12, Business & Commerce Code, is amended by | ||
adding Chapter 608 to read as follows: | ||
CHAPTER 608. SUBSCRIPTION SERVICE CONTRACTS | ||
Sec. 608.001. DEFINITIONS. In this chapter: | ||
(1) "Automatic renewal clause" means a provision of a | ||
contract that extends the term of or renews a contract if the | ||
consumer does not take a specified action. | ||
(2) "Consumer" means a person who acquires goods or | ||
services for personal, family, or household purposes. | ||
(3) "Service provider" means a business that provides | ||
a service to a consumer. | ||
(4) "Subscription service" means a service provided by | ||
a service provider to a consumer under a contract that: | ||
(A) has an automatic renewal clause; or | ||
(B) continues indefinitely until canceled by a | ||
party. | ||
Sec. 608.002. NOTICE REQUIREMENTS FOR SUBSCRIPTION SERVICE | ||
CONTRACTS. (a) If a service provider and a consumer enter into a | ||
contract for a subscription service, the service provider shall: | ||
(1) at the time the service provider enters into the | ||
contract with the consumer, clearly and conspicuously disclose to | ||
the consumer the: | ||
(A) nature of the contract; and | ||
(B) procedure for canceling the contract; | ||
(2) if the contract has a term of six months or more | ||
and automatically renews for a term of at least one month, give the | ||
consumer additional written notice of the automatic renewal and the | ||
procedure for canceling the contract not earlier than the 90th day | ||
and not later than the 15th day before the date the contract is set | ||
to renew; and | ||
(3) if the contract does not automatically renew but | ||
continues until canceled, give the consumer additional written | ||
notice of an upcoming payment not earlier than the 30th day and not | ||
later than the fifth day before the date the payment is due. | ||
(b) A service provider may provide the written notice | ||
required under Subsection (a)(2) or (3): | ||
(1) by regular mail or certified mail; | ||
(2) on an invoice delivered to the consumer; or | ||
(3) by written electronic communication, including | ||
electronic mail, if agreed to by the consumer. | ||
(c) Notice provided under Subsection (b) must be clear and | ||
conspicuous. For purposes of Subsection (b)(1), the service | ||
provider may assume that written notice sent by regular mail is | ||
received by the consumer on the third business day after the date | ||
the notice is deposited in the mail. | ||
Sec. 608.003. METHOD OF CANCELLATION. (a) A service | ||
provider shall allow a consumer to cancel a contract for a | ||
subscription service by using the same method as the consumer used | ||
to enter into the contract, including allowing cancellation online, | ||
by mail, or by telephone. | ||
(b) This section does not prohibit the service provider from | ||
allowing the consumer to cancel a contract by additional methods. | ||
Sec. 608.004. DECEPTIVE TRADE PRACTICE. (a) Except as | ||
provided by Subsection (b), a violation of this chapter is a false, | ||
misleading, or deceptive act or practice as defined by Section | ||
17.46(b), and any remedy under Subchapter E, Chapter 17, is | ||
available for a violation of this chapter. | ||
(b) A violation of this chapter is not a false, misleading, | ||
or deceptive act or practice if the service provider can | ||
demonstrate that: | ||
(1) as a part of its routine business practice, the | ||
service provider has established and implemented written | ||
procedures to comply with this chapter and enforces compliance with | ||
the procedures; | ||
(2) the violation of this chapter is the result of | ||
error; and | ||
(3) the service provider prospectively canceled the | ||
contract for the subscription service within a reasonable time | ||
after becoming aware of the error that caused the violation of this | ||
chapter, without penalty to the consumer, and has not subsequently | ||
automatically renewed or revived that same contract. | ||
(c) Subsection (b)(3) does not relieve a consumer of the | ||
consumer's duties under a contract before the date the contract is | ||
canceled. | ||
SECTION 2. Chapter 608, Business & Commerce Code, as added | ||
by this Act, applies only to a contract entered into or renewed on | ||
or after the effective date of this Act. | ||
SECTION 3. This Act takes effect September 1, 2021. |