Many states have laws that restrict the ability of a service provider to automatically renew a consumer’s contract for services. For example, the law in New York provides that a contract for service will not lawfully renew unless the company providing the service gives written notice to the consumer, which notice must call to the attention of the consumer the automatic renewal provision in the contract. Under this New York law, the written notice must be provided to the consumer at least fifteen, but not more than thirty days prior to the expiration of the consumer’s existing contract.
Many companies that provide services to consumers have provisions in their contracts which state that the consumer’s subscription or service package automatically renews when it expires. The state laws are designed to prevent prejudice to the consumers, who may not know about the automatic renewal provision because it is buried in fine print, or is found in some hard-to-reach place on the company’s website, which is why many states require the company providing the service to give written notice to the consumer, which calls attention to the automatic renewal provision. In practice, many companies fail to provide written notice to their consumers that their contracts are being renewed.
The typical example is where someone has a one-year subscription, which they reasonably assume ends after the year, without the consumer having to do anything affirmative to avoid having the contract automatically renewed when it expires. This makes common sense: if you purchase a year-long subscription to something, you should not have to call the company or do something affirmative in order for that contract not to be renewed for another year when it expires. The laws are designed to protect the consumers by requiring the companies to give them notice that their contract will be renewed automatically. Unfortunately, many companies fail to abide by the law and unsuspecting consumes find themselves automatically enrolled in another term of their contract.
By way of illustration, a person who subscribed to XM Satellite Radio for his car (e.g., a three-year subscription) was automatically renewed (and charged) for another three-year subscription, even though he did not own the car anymore, because he was never notified that he was supposed to call XM and tell the company that he did not want to renew for another subscription.
If you or someone you know has been affected by a company automatically renewing a contract, which you otherwise had reason to believe was expired, please contact us to discuss your rights.