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NY Automatic Renewal Law

New York’s Automatic Renewal Law

NY Automatic Renewal Law

New York’s Automatic Renewal Law (ARL) protects consumers by prohibiting businesses from engaging in certain practices when making an automatic renewal offer in the state. The New York ARL tracks California’s strict statutory requirements, which means that businesses must follow guidelines about disclosing renewal offer terms to consumers, giving customers the opportunity to affirmatively consent before they sign up for an auto-renewal program, and allowing customers to easily cancel their subscription afterwards. NY consumers who have enrolled in a subscription program without their consent should immediately reach out to a qualified New York false advertising attorney who understands both state and federal laws on auto-renewal offers.

To learn more about the New York automatic renewal law, keep reading this blog.

NY Automatic Renewal Bill: SB 1475

New York’s Automatic Renewal Law (ARL) is set forth in New York State Senate Bill S1475A. The law went into effect in February 2021 after being passed by the New York State Legislature and signed by NY Governor Andrew Cuomo. SB 1475 greatly expanded the scope of the state’s previous automatic renewal law, New York General Obligations Law § 5-903. The new ARL added substantial requirements for businesses that offer either automatic renewal plans or continuous service plans to consumers, including a stricter requirement that businesses notify consumers of the subscription terms after enrollment. Additionally, SB 1475 expanded the old law’s scope beyond service, maintenance, and repair contracts to also include consumer contracts involving “any goods, services, money, or credit for personal, family, or household purposes.”

New York businesses that offer auto-renewal subscription services to consumers must comply with SB 1475, relevant federal laws, and any other state ARLs which may be applicable if the purchase was made online by an out-of-state customer. Additionally, these businesses must also comply with New York’s older ARL, which remains in effect even after the passage of the new law.

New York ARL Requirements for Businesses

The New York ARL imposes the following requirements on businesses that offer consumer contracts for automatically renewing subscription services:

  • Auto-renewal terms must be conspicuous. The auto-renewal terms should be in visual proximity to the section where the consumer provides affirmative consent, and the terms should also stand out visually from the rest of the offer. (E.g., different text sizes, different fonts, and different colors.)
  • Auto-renewal terms must be clear. The terms and conditions of the subscription service must be easy for the consumer to understand. The exact language used by the NY ARL is that the offer terms should be presented “in a manner capable of being retained by the consumer.” (E.g., the offer should clearly state that the subscription will continue until the purchaser cancels.)
  • Must obtain affirmative consent from purchaser. The customer needs to affirmatively consent to the automatic renewal terms before it becomes a legally binding contract. Otherwise, NY law stipulates that any goods received by the consumer are an “unconditional gift” and do not need to be paid for.
  • Must send enrollment acknowledgement to consumer. After the customer has enrolled in the subscription program, the business needs to send a letter, email, or other type of written acknowledgement that states the program’s terms and cancelation policy.
  • Cancelation policy must match method used to subscribe. When a customer uses a company’s website to enroll in a subscription program, the company must allow the customer to cancel online.
  • Free trial offers must have cancelation options. If the company offers a “free” trial period before the subscription automatically renews for a monthly fee, the company needs to provide the consumer with the ability to opt out of the paid subscription service. Additionally, the cancelation policy must be presented clearly and conspicuously in the original agreement.
  • Must disclose any material changes to the agreement. It is common for businesses to modify their agreements later. But if a business wants to change the terms of an auto-renewal plan, they must have already alerted the consumer to this possibility in the original offer. Moreover, when making material changes to its subscription plan, the business must disclose those changes to the consumer and give the consumer an easy way to cancel their subscription.

Defenses Available to Businesses Accused of Violating the NY ARL

Although New York’s ARL provides strong protections to consumers who enroll in auto-renewal plans, there are some exceptions to the law that allow businesses to raise possible defenses against an alleged violation. For instance, the new ARL only applies to contracts for subscriptions involving consumers; business-to-business contract are addressed by the state’s old ARL.

SB 1475 also has a “safe harbor” provision that gives companies a possible defense when the violation was unintentional. If the company can show that they made a bona fide error despite taking reasonable measures to comply with the law, the New York Attorney General may choose not to bring charges.

What Remedies Are Available to Consumers in NY ARL Cases?

Compliance with the New York ARL is enforced by the NY Attorney General. The statute gives the state Attorney General authority to fine businesses as much as $100 for each violation of the auto-renewal law. When the violation was knowing and intentional, the fine can be increased to $500 for each violation. For companies with popular services and large subscription bases, these fines can add up quickly and serve as an effective deterrent against further abuse.

The individual consumers who enrolled in the unlawful subscription services also stand to benefit financially under New York’s auto-renewal law. That’s because the statute specifies that consumers who receive a service or product without providing affirmative consent for enrollment in the subscription program will not have to pay for the goods or services received. Additionally, they may be eligible to join a consumer class action lawsuit brought under one of the state’s consumer protection laws.

Contact the New York False Advertising Lawyers at Tauler Smith LLP

Tauler Smith LLP is a law firm that represents clients in consumer fraud litigation throughout the United States, including New York. Our experienced NY false advertising lawyers have filed complaints on behalf of clients in both federal and state court, and we know how to win these cases. Call or email us to speak with a member of our litigation team.

California Automatic Renewal Law

California’s Automatic Renewal Law

California Automatic Renewal LawThe explosion of the internet and e-commerce has led many businesses to offer their products and services through online subscription services. This has made it easier for consumers to quickly make purchases from their phone or computer, and it has also made it easier for companies to lock customers into subscriptions that renew automatically. These auto-renewal plans become problematic when companies use them to take advantage of customers who might not realize what they are signing up for. California’s Automatic Renewal Law (ARL) was a direct response to this problem, with state lawmakers codifying strong protections for consumers in these situations. The California ARL specifically requires businesses disclose all relevant subscription terms to customers, get consent from the customers before charging their credit cards, and provide customers with a way to easily cancel the contract.

To learn more about the California automatic renewal law, keep reading.

What Requirements Does California’s ARL Impose on Businesses?

Automatic renewal subscriptions affecting California consumers are governed by the state’s Automatic Renewal Law (ARL), which is set forth in Cal. Bus. & Prof. Code §§ 17600. The California ARL requires companies to clearly and conspicuously explain “automatic renewal offer terms.” State legislators passed the law for the purpose of stopping companies from continually charging consumer credit or debit cards without the consumers’ explicit consent for ongoing shipments of products or ongoing provision of services.

When a business violates the ARL by failing to properly disclose information about an auto-renewal offer, it may be possible for the customer to file a consumer fraud lawsuit and seek financial compensation from the business. If you have been billed for an automatically renewing subscription that you did not want to be enrolled in, your first step should be to speak with a California false advertising lawyer.

What Information Must Be Disclosed in California Auto-Renewal Offers?

California’s Automatic Renewal Law (ARL) is among the most consumer-friendly in the entire country, with other states modeling their own ARLs after it.

The California ARL requires companies to disclose the following information before a customer enrolls in an automatic subscription program:

  1. That the subscription will continue until the consumer cancels.
  2. A description of the policy for canceling the subscription.
  3. Any recurring charges that will be charged to the consumer’s credit card, debit card, or bank account as part of the automatic renewal plan, as well as whether the amount of the charge may change and how often the consumer will be billed.
  4. The length of the automatic renewal term. (If the service is continuous, this must also be disclosed.)
  5. Any minimum purchase obligation.

“Clear and Conspicuous” Disclosures Required Under California’s ARL

Importantly, section 17602 of the California ARL requires that the automatic renewal offer terms must be presented to the consumer both before the purchasing contract is fulfilled and after enrollment in the form of an email or other post-sale acknowledgement. There can be no concealing of the auto-renewal offer at any point in the process. Moreover, there can be no attempts by the company to thwart or frustrate a customer’s attempts to cancel the subscription. That’s because the ARL explicitly requires businesses to provide a “cost-effective, timely, and easy-to-use mechanism for cancelation.”

Additionally, those disclosures must be plainly visible and obvious to the customer. In fact, there are strict guidelines for the manner in which the information is presented. For example, the terms of the automatic subscription service must be in “visual proximity” to the request for consent to the offer. Those terms must also be presented “clearly and conspicuously” so that they can be distinguished from the rest of the offer. This means that the text of the auto-renewal offer should be:

  • In larger type than the surrounding text.
  • In contrasting type, font, or color to the surrounding text of the same size.
  • Set off from the surrounding text of the same size by symbols or other marks in a manner that clearly calls attention to the language.

Remedies Available Under California’s Auto-Renewal Law

What happens when a company violates the California automatic renewal law (ARL) by failing to clearly and conspicuously disclose the terms and conditions of a subscription service? The answer to this question depends on the facts and circumstances of your particular case, which is why it’s important for you to speak with a Los Angeles false advertising attorney who has knowledge of both state and federal automatic renewal laws, as well as other applicable California consumer protection laws. An experienced attorney may be able to force the company to stop its misleading sale and advertisement of services, in addition to helping you get full restitution of any expenses you’ve already incurred. In some cases, you may also be entitled to additional financial compensation for your losses or harm suffered.

Call the Los Angeles False Advertising Lawyers at Tauler Smith LLP

Tauler Smith LLP is a Los Angeles law firm that focuses on consumer fraud litigation, including violations of the California Automatic Renewal Law (ARL). Our false advertising lawyers represent plaintiffs in lawsuits filed against companies that misrepresent or fail to disclose the terms of their monthly subscription contracts. Call 310-590-3927 or email us to schedule a free consultation.

Macy’s Beauty Box Lawsuit

Macy’s Faces Lawsuit for Beauty Box Automatic Subscription

Macy’s Beauty Box Lawsuit

High-end department store Macy’s faces a lawsuit for its Beauty Box automatic subscription service. The company has been accused of violating consumer protection laws by using deceptive practices to enroll customers in an auto-renewal program for one of its popular beauty product services. Law firm Tauler Smith LLP believes that many people have probably fallen victim to Macy’s allegedly unlawful subscription practices. Since a lot of states like New York, California, and others have strict laws regulating automatic renewals, anyone who purchased the Macy’s Beauty Box from the Macys.com website may be able to file a lawsuit for financial compensation.

Tauler Smith LLP is looking to certify a class of plaintiffs nationwide for a class action lawsuit against Macy’s. If you purchased the Macy’s Beauty Box and were later charged for an ongoing subscription to which you did not consent, you should contact one of our lawyers immediately.

Macy’s Accused of Consumer Fraud

Macy’s Beauty Box is a monthly subscription package of deluxe beauty samples and beauty-related products that has attracted many customers. Unfortunately, the Beauty Box program’s terms and conditions are not always made clear to customers, which has exposed Macy’s to being named as a defendant in lawsuits in California, New York, and other states with strong consumer protection laws. For instance, the automatic renewal terms of Macy’s Beauty Box subscription program may be a violation of both the California Consumers Legal Remedies Act (CLRA) and the California Automatic Renewal Law (ARL). Specifically, Macy’s is enrolling customers into an automatic renewal subscription without providing the clear and conspicuous disclosures required by California law.

Some consumers may be unaware that they are being enrolled in an auto-renewal program when purchasing the Macy’s Beauty Box from the store’s website. For example, at least one customer has complained that she did not notice a second charge appearing on her credit card more than one month after her initial purchase. In fact, the entire checkout process on Macys.com appears to be designed to conceal the nature of the automatically renewing subscription and recurring charges. This could make it a clear violation of state consumer fraud laws, including automatic renewal laws.

Does Macy’s Beauty Box Subscription Service Violate Auto-Renewal Laws?

Macy’s, Inc. has been accused of committing numerous violations of automatic renewal laws, including the following:

  • Failure to clearly and conspicuously disclose auto-renewal terms.
  • Failure to disclose when and how often customers will be automatically billed.
  • Failure to inform customers of cancelation policy.
  • Making it difficult for customers to cancel subscription.
  • Failure to send email or other notification to customers after enrollment.

Clear & Conspicuous Disclosure

Macy’s has been accused of failing to clearly and conspicuously disclose its automatic renewal terms to customers who purchase the Macy’s Beauty Box on the store’s website. Although online customers check a box to indicate consent to be enrolled into a monthly subscription service, this box is not clear and conspicuous in the manner required by California’s ARL. For example, Macy’s does not present the auto-renewal offer terms in a larger type font than the surrounding text, nor is the text in the box distinguishable from the surrounding text via contrasting type, font, or color.

One way that Macy’s could have more clearly called attention to the automatic subscription language is by using bold, highlighted, all-capitalized, or different-colored text for the automatic renewal terms. Macy’s also could have employed a “call out” box near the terms so that the subscription enrollment contract was distinct from the product purchase agreement.

Timing of Automatic Charges

Macy’s does not adequately disclose the timing of the automatic charges. For example, the store represents that its customers will be automatically charged “monthly,” but the actual charges to consumers appear to occur in arbitrary intervals. For example, at least one customer was charged on her credit card 49 days after the initial charge.

Cancelation Policy

Macy’s does not adequately disclose how a customer can cancel their subscription. This information could be disclosed either directly on the Macy’s website or in an email sent to the customer after enrollment in the subscription service.

Frustrating Attempts to Cancel Subscription

Macy’s has failed to make it easy for a customer to cancel the subscription. In fact, it appears that Macy’s has intentionally made the cancelation process difficult and frustrating in the hopes that customers will abandon trying to cancel their subscriptions.

Email Acknowledgement After Enrollment

Macy’s fails to send an ARL-compliant retainable acknowledgement consistent with state consumer protection laws. When a customer enrolls in the Beauty Box subscription program, they do not receive an email from Macy’s that accurately explains the terms and conditions of the service. The absence of an email also means that customers are not informed of the policy for canceling the subscription. By failing to provide a permanently retainable post-transaction acknowledgement that allows for cancelation before payment, Macy’s is effectively concealing the nature of the agreement and violating state automatic renewal laws meant to protect consumers.

Macy’s Accused of Violating California’s Consumers Legal Remedies Act (CLRA)

In addition to possibly violating state automatic renewal laws, Macy’s has also been accused of violating broader consumer protection laws, such as the California Consumers Legal Remedies Act (CLRA). In California, a violation of the ARL can form the basis for a CLRA claim, as well as a claim under California’s Unfair Competition Law. One of the unlawful business practices that Macy’s has been accused of is failing to include a clear and conspicuous explanation of the price that will be charged for its Beauty Box subscription service. Another more general accusation against Macy’s is that the company fails to first obtain affirmative consent from customers before charging their credit and debit cards. All of these practices constitute violations of the ARL, which means that affected consumers may also be able to file lawsuits under the CLRA and other statutes.

Tauler Smith LLP Pursuing Class Action Lawsuit Against Macy’s for ARL Violations

Tauler Smith LLP is a law firm that represents consumers in false advertising claims in California, New York, and nationwide. We suspect that thousands of consumers may have been illegally enrolled in Macy’s Beauty Box subscription program. Our consumer protection lawyers are actively seeking plaintiffs for a possible class action lawsuit against Macy’s. The lawsuit seeks the following remedies on behalf of affected consumers:

  • Full financial restitution to all purchasers throughout the United States of all purchase money obtained from the sales of Macy’s services and products that violate automatic renewal laws.
  • Monetary compensation for any damages suffered by consumers because of Macy’s unlawful business practices.
  • Punitive damages for knowing and egregious violations.
  • An injunction ordering Macy’s to cease and desist from the continued misleading sale and advertisement of its Beauty Box services.
  • A corrective advertising campaign by Macy’s to inform consumers about the true price of any services they purchase, including any automatically renewing charges in connection with those services.
  • Payment by Macy’s of all reasonable attorney’s fees and court costs related to the lawsuit.
  • Additions to the Macy’s website that include a clear and conspicuous explanation of the amount customers will be charged for the Macy’s Beauty Box subscription service.
  • The inclusion of a mechanism for obtaining customers’ affirmative consent before Macy’s charges their credit and debit cards.
  • An email or other post-transaction acknowledgement sent by Macy’s to customers that will allow for cancelation of the subscription service before the first payment.

Did You Purchase the Macy’s Beauty Box? Contact the False Advertising Lawyers at Tauler Smith LLP

Were you enrolled in a monthly subscription service after purchasing the Macy’s Beauty Box, or any other product, from the Macys.com website? The false advertising attorneys at Tauler Smith LLP represent plaintiffs in pre-trial settlement negotiations and at trial, and we have helped countless clients achieve successful outcomes that include restitution and financial compensation. We are looking for plaintiffs nationwide in a possible class action lawsuit against Macy’s.

Call or email us to discuss your eligibility to join the lawsuit.