Press Release

Governor Signs Legislation Protecting Consumers with Automatic Service Purchases

SB 313 requires businesses signing up consumers for free trial services to disclose the cost of any automatic renewal of the product

September 28, 2017

SACRAMENTO – Sen. Bob Hertzberg, D-Van Nuys, announced today that Gov. Jerry Brown has signed his legislation that protects consumers who sign up for automatic renewal purchases by requiring disclosure of the cost and greater ease in canceling the arrangements.

SB 313 requires businesses that offer online signups for services or subscriptions that are automatically renewed to also offer a similarly straightforward way online to stop the renewal. Businesses often sign consumers up for a free trial offer of a product or service without clearly informing consumers that it will be automatically renewed at some time in the future for a charge.

“Clarity and transparency on automatic service purchases benefit consumers and enhance the marketplace,” Hertzberg said. “Consumers need to know what they are signing up for and that they can just as easily cancel any service or subscription online as when they started it online.”

In recent years, consumer complaints regarding automatic service renewals have triggered numerous lawsuits, including class-action lawsuits filed against Hulu, Dropbox and Spotify. While current law says the terms of trial offers and automatic renewals must be conspicuously posted on websites or communicated directly to consumers, canceling the service can be difficult to do.

The legislation was sponsored by the Consumer Federation of California.

“SB 313 promotes basic fairness by ensuring that consumers know exactly what they are agreeing to, and it makes it just as easy to cancel a subscription online as it is to sign up online,” said Richard Holober, Executive Director of the Consumer Federation of California.

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Bob Hertzberg, chair of the Senate Committee on Natural Resources and Water, represents nearly 1 million San Fernando Valley residents of Senate District 18, which includes part of Burbank and the following communities in Los Angeles: Arleta, Granada Hills, Hansen Dam, Lake View Terrace, Mission Hills, North Hills, North Hollywood, part of Northridge, Pacoima, Panorama City, Sherman Oaks, Studio City, part of Sun Valley, Sylmar, Toluca Lake, Valley Glen, Valley Village, Van Nuys, the City of San Fernando and Universal City. See a district map at http://sd18.senate.ca.gov/district.  After serving in the Assembly from 1996-2002, including two years as Speaker, Hertzberg invested in solar, wind and electric-car projects; and worked for structural changes in government through the Think Long Committee of California. Learn more at www.senate.ca.gov/hertzberg.

MEDIA CONTACT: Andrew LaMar
Communications Director
Senator Robert M. Hertzberg
Capitol Building, Room 4038
Sacramento, CA 95814
(916) 651-4018

 

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