Senate committee approves bill restricting free trials and auto pay subscriptions; newspaper exemption possible

Last week, SB 313 by Senator Bob Hertzberg (D-Los Angles), a measure that would restrict a newspaper’s ability to provide free gifts and trials with automatic renewal and continuous service offers, was passed in a unanimous 6-0 vote by the Senate Judiciary Committee. Senator John Moorlach (R-Costa Mesa) abstained.

At the hearing, Hertzberg told the committee that the bill was introduced to prevent unscrupulous businesses from taking advantage of consumers who forget that they signed up to receive ongoing services or products. He said these businesses also make it nearly impossible for a consumer to terminate these agreements.

CNPA staff testified in opposition to the bill and distinguished newspapers from the bad actors described by Hertzberg, “We have found that subscribers have little, if any, problem contacting newspapers to cancel their subscriptions,” staff told the committee.

Senator Moorlach asked the author if his bill might be a little too broad in light of CNPA’s opposition. Hertzberg responded that he didn’t think so but went on to say, “We can give the newspapers an exemption . . .”

Hertzberg confirmed in subsequent communications that the bill would likely be amended to address newspapers’ concerns.

The bill is sponsored by the Consumer Federation of California and opposed by CNPA, the California Chamber of Commerce, the Internet Association and several other business groups.

The bill would require newspapers that offer automatic renewal or continuous service subscriptions to obtain consent for the automatic renewal or continuous service separate from any acceptance by subscribers of a free gift or trial. It would also mandate that newspapers notify a new subscriber three days before the first service charge is made and includes new requirements regarding the cancellation options that newspapers would be required to offer.

SB 313 will likely be amended in the next few weeks before it is taken up on the Senate floor at the end of April.