January 21, 2021

Volume XI, Number 21

Advertisement

January 20, 2021

Subscribe to Latest Legal News and Analysis

January 19, 2021

Subscribe to Latest Legal News and Analysis

New York Passes Wide-Ranging Automatic Renewal (Subscription Model) Law

New York has enacted a sweeping law that regulates automatic renewal programs (subscriptions) modeled after California’s automatic renewal law

The law impacts all membership and other subscription-based business models

It’s a trend. New York will join 25 other U.S. states that have passed or enhanced existing automatic renewal laws to address consumer advertising, disclosures, consent, and cancelation

The new law (New York Senate Bill 1475) goes into effect on February 9, 2021.

Key requirements:

  • Subscription offer terms must be displayed in more clear and conspicuous type than surrounding text (e.g. in advertising)

  • Subscription terms must include the following disclosures:

    • subscription will continue until the consumer cancels

    • description of the cancellation policy

    • amount of the recurring charges, and that the amount may change, if that’s the case, and by how much the amount may change, if known

    • length of subscription term or that the service is continuous

    • minimum purchase obligation, if any

  • The business must first obtain the consumer’s affirmative consent to the subscription

  • The business must provide a cost-effective, timely, and easy-to-use mechanism for cancellation. There must be an online method of cancelation for online subscriptions

  • The business must provide an acknowledgment that includes the subscription terms, cancellation policy, and other information about how to cancel

  • If the offer includes a “free gift” or “free trial”, the offer must include a clear and conspicuous explanation of the price that will be charged after the trial

  • If there’s a material change in terms, the business must provide the consumer with a clear and conspicuous notice of the change and provide information about how to cancel

  • If there is a violation of this law, the New York Attorney General may seek an injunction and an order for restitution. Courts may impose civil penalties of $100 per violation, or up to $500 per “knowing” violation.

Advertisers and businesses offering memberships or other subscription-based services should take steps to ensure their advertising and consumer terms and conditions comply with automatic renewal laws in New York and other states.

Advertisement
Copyright © 2020, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume X, Number 337
Advertisement

TRENDING LEGAL ANALYSIS

Advertisement
Advertisement

About this Author

Brian D. Anderson, Intellectual Property, Attorney, Sheppard Mullin, Law firm
Associate

Brian D. Anderson is an associate in the Intellectual Property Practice Group in Sheppard Mullin's San Francisco and Palo Alto offices. He is a member of the Entertainment, Media, and Technology Industry Team.

Areas of Practice

Brian enjoys a broad intellectual property and commercial transactions, corporate, advertising and privacy and data security practice.

He focuses his practice on structuring and negotiating intellectual property and technology deals, such as...

415-774-3287
Advertisement
Advertisement