Automatically renewing contracts have become common place in the online marketplace. For some consumers, these can be incredibly helpful. No parent of young children wants to suddenly be without Disney+ as their child desperately begs to watch the latest animated movie for the umpteenth time. For other consumers, these contracts can be an absolute drag on their finances. These subscription services can be like that January gym membership. Sure, the consumer was going to use it that year when they signed up for it, but it gets forgotten. Twelve months later, they get an email thanking them for their $199 payment renewing it for the next twelve months.
New Jersey will be joining the Federal Trade Commission (FTC) and a growing number of states in regulating these automatic renewing contracts starting August 1, 2023. The new law passed in October will require service contractors to provide “written or electronic notification of the automatic renewal provision” before the contract is automatically renewed. The provider must send the notice to the consumer no fewer than 30 and no more than 60 days prior to the cancellation deadline. Pennsylvania currently only regulates automatically renewing contracts for health clubs; however, State Representatives and Senators have introduced bills regulating these contracts in the past few legislative sessions.
The new law in New Jersey requires businesses and individual consumers to remain vigilant by keeping track of the status of long-term service contracts. This vigilance is particularly required if you or your organization wants to cancel the service, an action which most service providers require you to do prior to receiving renewal payments. Adoption of this new law requires businesses and individuals providing long term service contracts to carefully manage renewal dates and ensure their technology department can meet the deadlines required by the law.
This is just another example of how laws impacting businesses and consumers change on a daily basis. If you need an attorney well-versed in the nuances of these laws so that your company can remain compliant or if you are a consumer who feels you have suffered an injustice as a result of a business decision, contact the attorneys at Leonard Sciolla. Our attorneys keep current on these law changes and can help you remain compliant or help you to gain justice if a company tries to take advantage of you.