June 10, 2010
The state of Florida passed a new bill affecting automatic renewal of contracts.
Under House Bill 751, titled, An act relating to automatic renewal of service contracts, service providers must include a clear and conspicuous clause in the contract specifying the terms of the automatic renewal, as well as give notice between 30 and 60 days prior that the contract will self-renew.
This statute was signed by Florida governor, Charlie Crist, on May 12, 2010 and will affect all contracts entered into on or after July 1, 2010. As Ken Kirschenbaum of Kirschenbaum & Kirschenbaum, P.C., Garden City, N.Y., points out in a recent newsletter, the bill exempts business subscribers, but also all renewals of up to one month, which he suggests sellers should consider as a safe bet in light of similar statutes passed and likely to pass across the United States.
At least 10 other states have passed or amended similar legislation in the past four years and ESA director of government relations, John Chwat says we will see many more follow suit. “I’m following about 23 to 24 [proposed bills] at the moment. Some have not passed this session but some are still active.” With all 50 state legislatures meeting in 2011, Chwat predicts those 23 or 24 bills could grow significantly. “It’s a big and popular issue in consumer protection at the state legislature level. And we haven’t seen the end of it.”
In addition to Florida, states with similar, enacted, automatic renewal legislation include Arkansas, Connecticut, Illinois, New Mexico, North Carolina, New York, Pennsylvania, Tennessee and Utah.