California Law Puts Clamp on Deceptive Auto-Rebills (XBIZ)

Read the full article by Rhett Pardon at XBIZ.com

LOS ANGELES — A new California law that went into effect on Sunday makes it unlawful for businesses to make automatic renewal offers that are deceptive.

Approved last year, California's SB 313 covers “any business that makes an automatic renewal or continuous service offer to a consumer in the state.”

Consumers in other states, as a consequence of the law taking effect, will likely benefit from the statute, which provides for civil remedies.

With the new law, businesses must state in their offers “a clear and conspicuous explanation of the price that will be charged after the trial ends or the manner in which the subscription or purchasing agreement pricing will change upon conclusion of the trial.”

“[It] would prohibit a business from charging a consumer's credit or debit card, or the consumer's account with a third party, for an automatic renewal or continuous service that is made at a promotional or discounted price for a limited period of time without first obtaining the consumer's consent to the agreement,” according to the new California law.