Regulation of Automatic Renewals Remains Key Issue for Lawmakers

Andrew Lustigman, Chair of Olshan's Advertising, Marketing & Promotions Group and Co-Chair of the firm’s Brand Management & Protection Group, and associate Morgan Spina published an article in New York Law Journal entitled “Regulation of Automatic Renewals Remains Key Issue for Lawmakers.” In the article, Andy and Morgan discuss the revision of statutes surrounding subscription renewal fees, specifically those that are relevant to the cancellation of automatic renewals. They outline that marketers must take inventory of their compliance obligations, as well as stay abreast of the legal revisions that may affect them in terms of renewal fees. “Although many states, including California and New York, already require an online cancellation option where the consumer signs up online, finalizing the Proposed Rule would require sellers to roll out simple online cancellations in all states,” Andy and Morgan write. “Even if…the Proposed Rule [were] amended in a way that would not require ‘click to cancel’ processes…automatic renewal laws are consistently moving through state legislatures, and many such laws are requiring online cancellation.” As the laws change, marketers should continue to assess their obligations on both a micro and macro level. Andy and Morgan advise examining trends regarding how lawmakers and regulators are approaching marketing practices regarding auto-renewals. “Regardless of how the FTC moves through its rulemaking process to the likely finalization of the Proposed Rule,” they explain, “there is already a movement toward online cancellation. As more states pass applicable laws, consumers are more likely to expect such options, which may ultimately shape overall expectations on marketers.”