ON CONSUMER CONTRACTS THAT ARE AUTOMATICALLY RENEWED

New York has intended to protect consumers from forgetting about an automatic renewal clause. For certain agreements for service, maintenance or repair to or for any real or personal property, New York’s General Obligations Law § 5-903 requires a specific reminder notice before renewal.

Protections have now been extended to other consumer agreements with a new Article 29-BB of the General Business Law effective February 9, 2021. According to the legislative history (S1475A/A3173):

"An increasing number of consumers are struggling with misleading offers
known as automatic renewals of merchandise and services. In a typical
scenario, consumers believe they made a one-time purchase or signed up
to receive a free product. Consumers then continue to receive more
deliveries of the merchandise, while incurring additional charges to
their credit cards or bank accounts. Many consumers fail to notice the
agreements - generally hidden in the fine print of an order - that they
unknowingly commit to while shopping.

This legislation would require that businesses provide automatic renewal
or continuous service offer terms in a clear and conspicuous manner
before the subscription or purchasing agreement is fulfilled, and
provide consumers with a straightforward, no- or low-cost means of
cancellation. Companies are also prohibited from advertising products as
"free" if the item is only distributed as part of an automatic renewal
agreement.

New York consumers should not be lured by false and deceptive practices
- nor should it be their responsibility to comb through the fine print
of a sales offer to determine if they will be trapped in an automatic
renewal offer. This legislation will ensure that consumers are made
fully aware of the terms and conditions of any offer before they provide
credit or debit card information."