December 01, 2017 | Response Magazine

Legal Review: California Tightens Automatic Renewal Requirements

1 min

Ellen Berge and Damon Wright published "Legal Review: California Tightens Automatic Renewal Requirements" for Response Magazine on December 1, 2017. Here is an excerpt of their article:

The "subscription economy" receives a lot of buzz these days, but the truth is that the business model of selling to consumers on a recurring basis — sometimes called "continuity" or "negative option" marketing — has been around for decades.

The subscription model's surge in popularity stems from its convenience and the growth of the internet economy. The model allows time-strapped consumers to simplify their lives by receiving uninterrupted delivery of their favorite foods, beauty products, lifestyle boxes (e.g., razor blades, dog treats, etc.), magazines and newspapers, as well as uninterrupted access to the latest streaming shows or online cloud storage to back up all the family vacation photos.

However, consumers sometimes are not clear on how to unsubscribe from a service or exactly what price they'll pay after a discounted or free trial period. That has made the subscription model a favorite enforcement target of the Federal Trade Commission (FTC), state attorneys general, and class action plaintiff attorneys. In response to the surge in popularity of subscription-based offers, many states are enacting or updating their automatic renewal laws (ARLs) to ensure consumer protection.