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Texas Telephone Solicitation Act

Texas Telephone Solicitation Act

Texas Telephone Solicitation Act

Telemarketing is an important tool used by many businesses to generate revenues, but it can also expose consumers to misinformation and fraud. That’s why Texas lawmakers passed important consumer protection laws that explicitly prohibit false, misleading, or deceptive practices. One such law is the Texas Telephone Solicitation Act, which regulates attempts by companies to sell or rent property, products, or services to consumers via telephone solicitation. The law is part of the Texas Business and Commerce Code, which protects consumers against a wide range of fraudulent business practices. The section of the statute governing telephone solicitations is meant to protect purchasers against false, misleading, or deceptive practices on sales calls. When a company makes a sales call, they must abide by the guidelines set forth in the statute. This includes filing a registration statement that contains relevant sales information, as well as making required disclosures to purchasers during telephone solicitations about both the company and the items for sale.

To learn more about the Texas Telephone Solicitation Act and the protections it affords consumers, keep reading this blog.

What Is the Texas Telephone Solicitation Act?

The Telephone Solicitation Act is codified in Texas Bus. & Com. Code, Title 10, Subtitle A, Chapter 302. The statute defines a “telephone solicitation” as a telephone call that is initiated to induce someone to buy, rent, claim, or receive an item. Importantly, the Texas law also covers phone calls made by consumers in response to a solicitation that was sent electronically (e.g., an email) or physically (e.g., a letter in the mail). Moreover, the law applies to calls placed manually, calls initiated by an automatic dialing machine, and calls that involve a recorded messaging device.

Telephone Solicitation Registration Requirements in Texas

The requirements of the Texas Telephone Solicitation Act are strictly enforced, with any violation by a telemarketer possibly triggering both civil and criminal penalties. The statute imposes requirements on companies both during the registration process and when the phone solicitation is made.

Seller Disclosures at Registration

Before making a telephone solicitation, sellers must first fill out a Telephone Solicitation Registration Statement and obtain a registration certificate for their business. Moreover, the registration statement must list each telephone number that will be used by the seller, as well as the specific locations from which any phone solicitations will be made. Other sales information that must be disclosed in the statement includes a copy of all telephone solicitation scripts and other material provided to salespersons, a copy of any written material that might be sent to consumers, and the contact information for outside product suppliers.

The registration statement is filed with the Texas Secretary of State, and it must identify each principal of the seller: owners, executive officers, general partners, trustees, etc. The registration certificate is valid for one year, and it must be renewed annually. Additionally, for every three-month period after the certificate was issued, the business must provide information for each salesperson who solicited on behalf of the business.

One of the most important requirements imposed by the Telephone Solicitation Act is the security requirement: sellers must submit a security deposit in the amount of $10,000. The deposit is meant to ensure that the seller complies with the law. When a seller is found to have violated the statute, the deposit may be used as payment for any penalties imposed by the court.

Seller Disclosures on the Call

In addition to requiring disclosures in the registration statement filed with the state, the Texas Telephone Solicitation Act also compels companies to make certain disclosures to consumers before a purchase is made through a phone solicitation. For example, prior to the finalization of any transaction on a sales call, the seller must provide the consumer with the street address of the building or office from which the call is being made. Additionally, if the seller tells the consumer that the item is being offered at a reduced price, the seller must provide the name of the manufacturer. Along those same lines, if the seller represents that one of the items is a gift or prize, then they also need to clearly state the contest rules.

The Telephone Solicitation Act also places a significant limitation on exactly what telemarketers are allowed to say during a sales call: the caller is not allowed to state or otherwise reference their supposed compliance with the statute. The idea behind this restriction is that sellers should not be able to discourage consumers from investigating on their own to determine whether a seller violated the law by making a deceptive sales call.

How to File a Civil Lawsuit Against a Telemarketer in Texas

Consumers who are defrauded, scammed, or otherwise injured by a telemarketer’s violation of the Telephone Solicitation Act can take legal action. Experienced Texas consumer fraud lawyers know just how strong the statute’s protections are, and they also know how to navigate the legal system to hold businesses accountable for violating the law.

One option available to consumers is to file a civil suit against the company or person who made the sales call. Any individual who suffered economic losses due to a seller breaching an agreement that was entered into during a telephone solicitation may be eligible to recover financial compensation against the seller’s security deposit with the state. It might also be possible for consumers to bring a claim under the Deceptive Trade Practices Act (DTPA) because a violation of the Telephone Solicitation Act qualifies as a violation of the DTPA. Additionally, a person bringing a civil action under either statute may be entitled to compensation for reasonable attorney’s fees and related legal expenses.

Burden of Proof

The protections set forth in the Texas Telephone Solicitation Act are far-reaching and tend to be interpreted broadly by judges. In fact, the statute even stipulates that the burden of proof in these cases will be on the defendant accused of violating the law. For example, in civil proceedings where the defendant argues that they are exempt from the law, the burden of proving the exemption will fall on the defendant. Similarly, a company or individual who faces criminal charges for violating the telephone solicitation law is required to produce evidence supporting their defense that they are exempt from the statute.

Which Sellers Are Exempt from the Texas Telephone Solicitation Act?

Some sellers accused of violating the Telephone Solicitation Act may be able to argue that the consumer protection law does not apply to them, but only in certain situations. Those who may be exempt from the statute include agents of publicly traded companies, sellers for banks or other supervised financial institutions, anyone associated with companies regulated by the Public Utility Commission of Texas, individuals who are already subject to regulation by the Federal Communications Commission (FCC), and educational institutions or nonprofit organizations that are exempt from taxation by the IRS. In many instances, exemption from the Telephone Solicitation Act is possible because another law or regulation applies instead and takes precedence.

The Texas Business and Commerce Code also includes explicit exemptions from the phone solicitation law for the following categories of sellers:

  • Anyone selling a subscription to a newspaper, magazine, or cable television service.
  • Anyone selling items to a consumer who has consented in advance to receiving periodic deliveries of those items.
  • Individuals or companies delivering catalogs that are distributed in at least one other state and that have a circulation of at least 250,000 customers.
  • Anyone selling items to a business that plans to resell the items.
  • Persons or companies attempting to sell food products.
  • Persons calling about maintenance or repair of an item that was previously purchased from them.
  • Businesses soliciting a former or current customer.

Criminal and Civil Penalties Imposed by the Texas Telephone Solicitation Act

Every individual violation of a provision in the Texas Telephone Solicitation Act is considered a separate offense, which means that the penalties can add up very quickly even when the offenses stem from a single sales call. Beyond that, there can be both civil and criminal penalties imposed against sellers who violate the statute.

Criminal Penalties

Violations that may be charged as criminal offenses include failing to obtain the necessary registration certificate before making a phone solicitation, failing to make necessary disclosures to the consumer before finalizing a sale, and mentioning compliance with the statute on the sales call. Each of these offenses can be charged as a class A misdemeanor, which carries a possible fine of $4,000 and a sentence of up to one year in jail. Moreover, these criminal penalties can be imposed against both the business owner and the salesperson or telemarketer who made the call. Additionally, the defendant in a criminal action may be ordered to pay the costs of prosecuting the case, including the attorney general’s expenses for the investigation, depositions, witnesses, and related attorney’s fees.

Civil Penalties

Sellers who violate a provision in the Texas Telephone Solicitation Act are also subject to civil penalties. These penalties can be substantial, with the statute calling for a fine of up to $5,000 for each violation. The penalties become even harsher when the seller violates an injunction brought by the secretary of state for a previous offense: a $25,000 fine for each subsequent violation, plus an additional $50,000 fine for all violations after the injunction was issued.

Contact the Texas Consumer Protection Lawyers at Tauler Smith LLP

Did you receive a telemarketing call from a person who failed to identify themselves, their business, or their reason for calling? Did the telemarketer’s attempts to sell you something feel like part of a scam? The Texas Telephone Solicitation Act gives consumers the ability to take legal action by notifying the secretary of state and possibly filing a civil suit, and the Texas consumer protection attorneys at Tauler Smith LLP can help you.

Call or email us today to discuss your case.

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.

Automatic Subscription Renewal Law

The Legality of Automatically Renewing Subscriptions

Automatic Subscription Renewal Law

You know the feeling. You sign up for a one-year subscription—whether it’s for TV and internet services, food delivery, clothing, a dating app, or countless other products and services—intending to pay only for that year. Or you sign up for a “free trial,” thinking you will only be charged if you actually buy the service. But then, without your knowledge and consent, you are charged for an additional subscription period, or for a product or service you never intended to buy. Unfortunately, this happens to consumers every day, and companies often rely on these deceptive practices to get your business and your money.

The good news is that many states, including California, have laws like the ARL to ensure that consumers enter subscription programs with full knowledge and affirmative consent. To learn more, keep reading this blog.

What Is the Automatic Renewal Law?

In 2009, the California Legislature passed the Automatic Renewal Law, Business and Profession Code Section 17600 (the “ARL”), to “end the practice of ongoing charging of consumer credit or debit cards . . . without the consumers’ explicit consent for ongoing shipments of a product or ongoing deliveries of service.”

You may be entitled to relief under the ARL if any of the following apply:

  1. You were charged for a subscription that automatically renewed without your knowledge and consent.
  2. You signed up for a “free trial,” and without being able to cancel the service, were charged anyway.
  3. You signed up for a “free trial,” and there was no “clear and conspicuous explanation” of the offer’s pricing or change in pricing upon the trial’s end.
  4. You signed up for the subscription online, but there is no online cancellation option.
  5. For non-online subscriptions, there are none of the following cancellation methods: (a) a toll-free telephone number; (b) an email address; (c) a postal address, if the seller directly bills the consumer; or (d) another “cost-effective, timely, and easy-to-use mechanism.”

What Are the Disclosure Requirements Under the ARL?

Under the ARL, any business initiating an automatic renewal or continuous service offer to a California consumer must:

  • Disclose the terms of the offer.
  • Obtain the consumer’s affirmative consent.
  • Provide the consumer an acknowledgement of the order.
  • Provide simple cancellation procedures, along with other miscellaneous requirements.

Whether they are offered orally or in writing, the offer terms must be disclosed in temporal or visual proximity to “the request for consent to the offer.” Id. § 17602(a)(1).

The disclosures must also be “clear and conspicuous.” Id. A visual disclosure is clear and conspicuous if it is “in larger type than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same size . . . in a manner that clearly calls attention to the language.” Id. § 17601(c). An audio disclosure is clear and conspicuous if it is “in a volume and cadence sufficient to be readily audible and understandable.” Id. Three other important aspects of the ARL are: A company must allow a consumer to cancel an automatic renewal or continuous service offer exclusively online if the consumer accepted the offer online ( § 17602(c)); and An automatic renewal or continuous service offer that includes a free gift or trial must have a “clear and conspicuous explanation” of the offer’s pricing or change in pricing upon the trial’s end ( § 17602(a)(1)); and A “free gift or trial” triggers a disclosure in the acknowledgement about how to cancel–and an allowance for cancellation–before the consumer pays for the good or service ( § 17602(a)(3)).

Can You Sue If Your Subscription Was Automatically Renewed Without Your Consent?

Although there is no private right of action under the ARL, a private plaintiff may bring an action under California’s Unfair Competition Law, Business & Professions Code §§ 17200 et seq. (“UCL”), for restitution and injunctive relief, as long as the plaintiff has suffered injury in fact and lost money or property. See Lopez v. Stages of Beauty, LLC, 307 F. Supp. 3d 1058, 1070 (S.D. Cal. 2018).

Contact the California False Advertising Lawyers at Tauler Smith LLP Today

Victims of suspicious or unauthorized charges on their credit cards should report illegal subscription renewals to the California false advertising lawyers at Tauler Smith LLP. Our experienced attorneys can investigate the subscriptions and help you obtain compensation. Call 310-590-5927 or fill out the online contact form to schedule a consultation.