Since California enacted its Automatic Purchase Renewals Law (APRL) in 2010, the plaintiffs’ class action bar has been active in suing companies with subscription-based services for their alleged failures to comply with the APRL requirements. The lawsuits stem from the alleged failure to comply with the disclosure, consent, and acknowledgment requirements applicable to many types of subscriptions. Non-compliance has resulted in million-dollar class action settlements and government civil penalties. This summer, the APRL got tougher.
The APRL applies to companies that charge payment cards of California consumers as part of using “automatic renewals” or providing “continuous services.” An “automatic renewal” is an arrangement to automatically renew and charge for a subscription at the end of its term. A “continuous service” is an arrangement where subscription continues and charges are initiated until the consumer cancels the service.
Generally, and even before the amendment, the APRL requirements include:
- Presenting the terms of the automatic renewal offer or continuous service in a clear and conspicuous manner where or when the offer is made.
- Obtaining consumer’s affirmative consent before charging a consumer for the automatic renewal or continuous service.
- Providing an acknowledgment of key terms, including cancellation instructions, to the consumer.
- Implementing a method to cancel (as described in the acknowledgment) by toll-free phone, email, mail, or other “cost-effective, timely, and easy-to-use” method, and permitting consumers to cancel prior to charging at the end of a free trial.
- Notifying the consumer in a clear and conspicuous manner prior to any material changes to the original terms.