Unauthorized “Auto Renewals”
The automatic renewal of services, memberships, and subscriptions has become commonplace. Unfortunately, many companies do not disclose their automatic renewal terms to the consumers.
As a result, consumers who only intended a one-time purchase and who never use the service or product again get saddled with charges to which they never meant to give consent. What is even worse, some companies automatically renew their services even for those consumers who merely signed up for a “free trial” and were prompted to enter their credit card information.
When this happens, consumers are often unaware that they are paying for the services until much later, when they for example review their bank statement and see that they have been charged for the past year for something they have not used in eleven months.
To address these unscrupulous practices, California legislature has passed a law that makes it unlawful for companies to:
- Fail to present automatic renewal terms in a “clear and conspicuous manner”;
- Charge the consumer’s credit card without first obtaining the consumer’s affirmative consent to the agreement containing the auto-renewal terms;
- Fail to provide the consumer with a receipt/acknowledgement containing the automatic renewal terms and cancellation information.
If you believe that a company you dealt with has violated this law, or you otherwise believe that you have been a victim of illegal or unfair auto-renewal, call us at (310) 575-2550 or email us to discuss your potential claims.