Two Pending Laws Would Impact Subscription Arrangements

Recently proposed legislation in New York and in Maine, if passed, would impact businesses that provide subscription arrangements. These laws reflect a growing legislative trend to regulate goods and services billed on an auto-renewal basis.

Maine - An Act Regarding the Cancellation of Subscription Services
LD 1390 would require a person that provides certain goods or services pursuant to a subscription agreement to provide to a subscriber, at the time the subscription starts, information regarding how the subscriber may cancel the subscription; a secure, prominently displayed and easy-to-use method on the person's website that allows the subscriber to cancel the subscription immediately without having to send a letter by the United States Postal Service or other delivery service or to make a telephone call; and the option to cancel the subscription using the same method that was used to start the subscription. A violation of the provisions of the bill is a violation of the Maine Unfair Trade Practices Act. Covered services include: Newspapers, magazines, journals and periodicals and online news sources, including, but not limited to, online versions of newspapers, magazines, journals and periodicals; Cable or Internet services; Online media players; Social networking services; Internet gaming services; and Other Internet subscriptions

New York - Magazine Subscriptions
NY S4675 / NY A5337, if passed, would require that every publisher of a magazine sold by subscription shall disclose by a notice on the billing statement or billing invoice of each magazine mailed pursuant to subscription, a customer service telephone number; such notice shall be printed or written in a clear and conspicuous form.

Practice Pointer: Businesses that utilize automatic renewal to charge for their goods and services must stay on top of the evolving laws and standards governing such transactions. Governmental authorities are increasingly proposing new restrictions and requirements on such arrangements.

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