Bill restricting free trials and auto pay subscriptions amended to remove newspaper concerns

SB 313 by Senator Bob Hertzberg (D-Los Angeles), which as introduced, would have restricted a business’s ability to provide free gifts and trials with automatic renewal and continuous service offers, was amended hours before it was scheduled to be heard by its last policy committee in order to remove its most onerous provisions.

After the bill was amended, the Assembly Privacy and Consumer Protection Committee unanimously approved the bill on a 10-0 vote.

The bill is sponsored by the Consumer Federation of California and opposed by CNPA, the California Chamber of Commerce, the Internet Association and a long list of companies that rely on free gifts and trials to attain new customers.

The coalition of opponents was able to negotiate the amendments to the bill that removed the requirement that companies offering free trials or gifts contact the customer at the end of the trial period and get separate, independent consent from the customer before charging the customer’s credit card.

Instead, the amendments provide that these businesses would be required to include “a clear and conspicuous explanation of the price that will be charged after the trial ends or the manner in which the subscription would change upon conclusion at the trial.”

Additionally, the amendments would require businesses that receive acceptance of automatic renewal offers online to allow a consumer to terminate the auto renewal agreement online. This may include a termination email formatted and provided by the business that a consumer can send to the business without adding additional information.

Most importantly, none of the new restrictions would prohibit a business from contacting the consumer who terminates the auto renewal online to persuade the consumer to change his or her mind or make a subsequent offer.

Also, rather than becoming effective on Jan. 1, 2018 with all other bills that are signed by the governor, SB 313 will not become effective until July 1, 2018.

Once Sen. Hertzberg explained the amendments to the committee and agreed to accept them, all opponents to the bill said they would remove their opposition.