August 12, 2019
Media contact: National Consumers League – Carol McKay, firstname.lastname@example.org, (412) 945-3242 or Taun Sterling, email@example.com, (202) 207-2832
Washington, DC—The National Consumers League (NCL), the nation’s pioneering consumers and worker advocacy organization, calls upon state legislatures across the country to take action to protect consumers from deceptive automatic renewal clauses.
While automatic renewal provisions in consumer contracts, also known as negative option clauses, are billed as helping consumers avoid service disruptions, they can result in financial hardship for consumers. Dishonest companies continue to place these clauses into the fine print of contracts to mask rate hikes, renew gym memberships, generate recurring deliveries, or cause other services to renew without a consumers’ knowledge or consent.
The following statement is attributable to Brian Young, NCL’s public policy manager:
At least 22 states have some protections from automatically renewing contracts; however media reports have shown that companies are now using the guise of a ‘free trial’ to secretly roll consumers into binding contracts, sometimes after as little as a few days. Such clauses can trap consumers in expensive and unwanted contract renewals.
NCL is calling upon each state legislature to review their laws and enact comprehensive legislation. Recently enacted legislation in the District of Columbia is a model bill which requires:
- clear disclosure of all automatic renewal clauses;
- a consumer’s affirmative consent for free trials to be rolled over into a contract at the end of a free trial period; and
- notification by mail, email, or another method of the consumer’s choosing, to be sent to consumers if their long-term contract is set to renew to a “month to month” or longer subscription.
Thirty-five percent of consumers have complained that they have signed up for an automatically renewing contract without realizing it. Likewise, 48 percent of consumers have had a free trial roll over into a contract without their knowledge. The time is long overdue for state legislators to step in and take action to ensure consumers are not tricked into costly and deceptive business practices.
About the National Consumers League
The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.