HB296 Alabama 2020 Session

Existing law does not specifically require a company offering a free trial of products or services to make a clear declaration of what happens after the free trial concludes

This bill would require a company offering a free trial of products or services to include in that offer a clear and conspicuous explanation of the price that will be charged after the trial period ends or the manner in which the subscription or purchasing agreement pricing will change upon the conclusion of the trial period

Relating to consumer protection; to require clear and conspicuous notice to a consumer regarding a free trial period for a product or service and how the subscription or purchasing agreement pricing will change upon the conclusion of that trial period.

Section 1

(a) It shall be unlawful for any business that makes an automatic renewal or continuous service offer to a consumer in this state to do any of the following: (1) Fail to present the automatic renewal offer terms or continuous service offer terms in a clear and conspicuous manner before the subscription or purchasing agreement is fulfilled and in visual proximity, or in the case of an offer conveyed by voice, in temporal proximity, to the request for consent to the offer. (2) Charge the consumer's credit or debit card, or the consumer's account with a third party, for an automatic renewal or continuous service without first obtaining the consumer's affirmative consent to the agreement containing the automatic renewal offer terms or continuous service offer terms. (3) Fail to provide an acknowledgment that includes the automatic renewal or continuous service offer terms, cancellation policy, and information regarding how to cancel in a manner that is capable of being retained by the consumer. If the offer includes a free trial, the business shall also disclose in the acknowledgment how to cancel, and allow the consumer to cancel, before the consumer pays for the goods or services. (b) A business that makes automatic renewal or continuous service offers shall provide a toll-free telephone number, electronic mail address, a postal address if the seller directly bills the consumer, or another cost-effective, timely, and easy-to-use mechanism for cancellation that shall be described in the acknowledgment specified in subdivision (3) of subsection (a). (c) In the case of a material change in the terms of the automatic renewal or continuous service offer that has been accepted by a consumer in this state, the business shall provide the consumer with a clear and conspicuous notice of the material change and provide information regarding how to cancel in a manner that is capable of being retained by the consumer. (d) The requirements of this section shall apply only prior to the completion of the initial order for the automatic renewal or continuous service, except as follows: (1) The requirement in subdivision (3) of subsection (a) may be fulfilled after completion of the initial order. (2) The requirement in subsection (c) shall be fulfilled prior to implementation of the material change.

Section 2

(a) It shall be unlawful for any business that makes an automatic renewal offer or continuous service offer to a consumer in this state to do any of the following: (1) Fail to present the automatic renewal offer terms or continuous service offer terms in a clear and conspicuous manner before the subscription or purchasing agreement is fulfilled and in visual proximity, or in the case of an offer conveyed by voice, in temporal proximity, to the request for consent to the offer. If the offer also includes a free gift or trial, the offer shall include 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. (2) Charge the consumer's credit or debit card, or the consumer's account with a third party, for an automatic renewal or continuous service without first obtaining the consumer's affirmative consent to the agreement containing the automatic renewal offer terms or continuous service offer terms, including the terms of an automatic renewal offer or continuous service offer that is made at a promotional or discounted price for a limited period of time. (3) Fail to provide an acknowledgment that includes the automatic renewal offer terms or continuous service offer terms, cancellation policy, and information regarding how to cancel in a manner that is capable of being retained by the consumer. If the automatic renewal offer or continuous service offer includes a free gift or trial, the business shall also disclose in the acknowledgment how to cancel, and allow the consumer to cancel, the automatic renewal or continuous service before the consumer pays for the goods or services. (b) A business that extends an automatic renewal offer or continuous service offer shall provide a toll-free telephone number, an electronic mail address, a postal address if the seller directly bills the consumer, or it shall provide another cost-effective, timely, and easy-to-use mechanism for cancellation that shall be described in the acknowledgment specified in subdivision (3) of subsection (a). (c) In addition to the requirements of subsection (b), a consumer who accepts an automatic renewal or continuous service offer online shall be allowed to terminate the automatic renewal or continuous service exclusively online, which may include a termination email formatted and provided by the business that a consumer can send to the business without additional information. (d) In the case of a material change in the terms of the automatic renewal or continuous service that has been accepted by a consumer in this state, the business shall provide the consumer with a clear and conspicuous notice of the material change and provide information regarding how to cancel in a manner that is capable of being retained by the consumer. (e) The requirements of this section shall apply only prior to the completion of the initial order for the automatic renewal or continuous service, except as follows: (1) The requirement in subdivision (3) of subsection (a) may be fulfilled after completion of the initial order. (2) The requirement in subsection (d) shall be fulfilled prior to implementation of the material change.

Section 3

This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.