On March 23, Governor Brad Little signed the Idaho Subscription bill into law (“Idaho Subscription Law”). The Idaho Subscription Law will regulate subscription offers and automatic renewals that are marketed to consumers on or after January 1, 2023. The law adds provisions to protect consumers from unfair and deceptive trade practices involving the cancellation of subscriptions and other automatic renewal plans. Sellers that want to offer subscription services or other automatic renewal plans to consumers in Idaho must now prepare to comply with the new law.
Automatic Renewals as Defined by the Idaho Subscription Law
Automatic subscription renewal contracts are arrangements made via the Internet in which paid subscriptions or purchasing agreements are automatically renewed for a specific price at the end of a definite term on a recurring basis unless the consumer cancels the agreement. If contracts are renewed on terms of 12 months or more, they are referred to as “extended automatic subscription renewals” under the Idaho Subscription Law.
Clear and Conspicuous Disclosures of Renewal Terms
Pursuant to the terms of the new law, marketers will be required to clearly and conspicuously disclose: 1) the automatic renewal offer terms; and 2) the methods that consumers may use to cancel subscriptions. At a minimum, marketers must set up a free online cancellation method and permit consumers to cancel in the same manner that they originally subscribed. Phone numbers are an acceptable cancellation method as long as the numbers are toll-free and prominently displayed in the subscription disclosure.
For extended automatic subscription renewal offers, marketers must notify consumers prior to the applicable automatic renewal date. The Idaho Subscription Law requires marketers to send such notices to consumers 30 to 60 days before the renewal dates. For example, if a consumer signed up for a 12-month subscription plan on 1/01/22, the renewal notice should be sent between 11/2/22 and 12/2/22. In addition to the disclosure requirements set forth above, these notices must clearly and conspicuously:
- Describe the goods or services to be delivered;
- State the subscription price;
- Inform the consumer that the goods or services will be provided unless the consumer informs the seller that the goods or services are not wanted; and
- Provide the consumer with at least two (2) methods of cancellation.
Federal Rules Must be Complied With as Well
Please note that sellers need to comply with the Federal Trade Commission’s (“FTC”) automatic renewal rules, as well as the Idaho Subscription Law. The FTC requires that subscription sign-up processes be clear and conspicuous and that companies obtain consumers’ express informed consent to the program terms. For subscription offers to be considered clear and conspicuous, marketers need to disclose: 1) the amount or range of charges; 2) if applicable, any increase in costs after a trial period ends; 3) the recurring basis of charges; and 4) the dates charges will be submitted for payment. Express informed consent to the renewal terms may be obtained from consumers where they agree (check a box) to the automatic renewal feature separately from other portions of the transaction. In addition, consumers should easily be able to cancel their subscriptions. If a seller’s subscription plan fails any of the FTC’s requirements, the business will be subject to regulatory action, including potential civil penalties.
If you are interested in learning more about this topic or require assistance with setting up an automatic renewal marketing plan, please email us at email@example.com, or call us at (212) 246-0900.
The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.
Photo by Kindel Media from Pexels.
Similar Blog Posts:
Colorado’s New Automatic Renewal Law Effective January 1, 2022!
FTC Guidelines on Negative Option Marketing Released