On Monday, October 4, 2021, California Governor Gavin Newsom signed AB 390, which amends the state's Automatic Purchase Renewal law, CA Bus & Prof Code 17600 et seq.  The revised law goes into effect July 1, 2022.

 

To summarize, the law now requires the following:

 

Order Acknowledgement
A business that makes an automatic renewal offer or continuous service offer must provide an acknowledgment of the order 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 or continuous service offer includes a free gift or trial, the notice must also disclose how to cancel to avoid the charge following such period.

Notice Following Free Trial or Promotional or Discounted Price Period
A business is required to send a notice to consumers if either of the following apply to the offer (if both apply, only the notice in (2) is required):

(1) The consumer accepted a free gift or trial (does not include a free promotional item or gift that differs from the subscribed product) or a promotional or discounted price lasting for more than 31 days (in such case the notice must be sent between 3 and 21 days before the expiration of the free trial or promotional or discounted price period).  This notice is not required if the consumer did not enter into the contract electronically and the business has not collected or maintained the consumer's valid email address, phone number, or another means of notifying the consumer electronically.

 

(2) The offer had an initial term of one year or longer that automatically renews unless cancelled (in such case the notice must be sent between 15 and 45 days before the automatic renewal offer or continuous service offer renews).

The above notice must disclose:
o That the automatic renewal or continuous service will automatically renew unless the consumer cancels.
o The length and any additional terms of the renewal period.
o One or more methods by which a consumer can cancel the automatic renewal or continuous service.
o If the notice is sent electronically, the notice must include either a link that directs the consumer to the cancellation process, or another reasonably accessible electronic method that directs the consumer to the cancellation process if no link exists.
o Contact information for the business.

Notice of a Material Change to the Automatic Renewal Terms
A business must provide consumers who accepted an automatic renewal offer or continuous service offer with a clear and conspicuous notice of any material change in the terms of the automatic renewal or continuous service and provide information regarding how to cancel in a manner that is capable of being retained by the consumer.

 

A business must provide a toll-free telephone number, electronic mail address, a postal address (if the seller directly bills the consumer), or another cost-effective, timely, and easy-to-use mechanism for cancellation as described in the acknowledgment notice.

A business that allows consumers to accept an automatic renewal or continuous service offer online shall allow consumers the ability to terminate the automatic renewal or continuous service exclusively online, at will, and without engaging any further steps that obstruct or delay the consumer's ability to terminate the automatic renewal or continuous service immediately.  

Note: The amendment changed this requirement from "a consumer who accepts the offer online" to "a business that allows consumers to accept an  . . . offer online," which now arguably captures consumer orders that were placed in a medium other than online, if the same offer was made available online.  

 

The business shall provide a method of termination that is online in the form of either of the following:
o A prominently located direct link or button which may be located within either a customer account or profile, or within either device or user settings; OR
o By an immediately accessible termination email formatted and provided by the seller that a consumer can send to the business without additional information.

Authentication.  A seller may require a consumer to enter account information or otherwise 

authenticate online before terminating the automatic renewal or continuous service online if the consumer has an account with the business. A consumer who is unwilling or unable to enter account information or otherwise authenticate online before termination of the automatic renewal or continuous service online shall not be precluded from authenticating or terminating the automatic renewal or continuous service offline using another method as described above (a toll-free telephone number, electronic mail address, a postal address if the seller directly bills the consumer, or it shall provide another cost-effective, timely, and easy-to-use mechanism.