If you run an adult website you are no doubt familiar will rebills. Well now there is a new law to governs such activity that you need to be aware of.
The California Automatic Renewal Law (ARL) is designed to protect consumers from being unknowingly enrolled in subscription services by ensuring businesses follow strict guidelines for transparency and consent. The law mandates that companies offering subscription services clearly present the terms of the offer and obtain explicit consent from consumers before charging them on a recurring basis. The key provisions of the law are as follows:
Key Requirements
- Clear and Conspicuous Disclosure: Businesses must display the terms of the subscription offer in a clear and easily noticeable way, ensuring that consumers are aware of key details such as:
- The subscription’s automatic renewal until canceled.
- The amount charged, including any changes in price.
- The cancellation policy.
- The duration of the subscription (if relevant) or if it is continuous.
- Any minimum purchase obligations.
- Affirmative Consent: Before billing, businesses must obtain explicit consent from the consumer, including for any promotional or discounted pricing. If this consent is not obtained, the goods or services are considered a gift, and the consumer is not liable for the charges.
- Acknowledgment: After subscribing, the business must send the consumer an acknowledgment in a retainable form (e.g., an email) detailing:
- The terms of the subscription.
- How to cancel before being charged, particularly if there is a free trial.
- Contact information for the business.
- Annual Renewal Notices: For subscriptions lasting one year or longer, businesses must send a renewal notice 15 to 45 days before the renewal date. For subscriptions with a free trial or discount period longer than 31 days, businesses must notify consumers 3 to 21 days before the end of the trial period.
- Cancellation Process: The law emphasizes that cancellation must be straightforward and accessible. If a consumer signed up online, they must be able to cancel through a similar, easy-to-navigate online method, such as a “click to cancel” button. Businesses are prohibited from engaging in any practices that would obstruct or delay the cancellation process.
- Retention of Consent: Businesses must retain proof of the consumer’s affirmative consent for at least three years or one year after the contract ends, whichever is longer.
- Amendments in 2024: The 2024 amendments further strengthen consumer protection by:
- Requiring annual reminders about subscription renewals.
- Requiring businesses to disclose fee changes with a 7- to 30-day notice.
- Prohibiting any misrepresentation of material facts about the subscription terms.
- Making the cancellation process seamless by ensuring consumers can cancel in the same medium in which they signed up, whether online, by phone, or another method.
The updated law aims to ensure that consumers have full control and understanding of their subscription commitments and can easily cancel if desired. The recent amendments and additional clarifications will take full effect in July 2025.