Editor’s note: This commentary is by Sen. Michael Sirotkin, a Chittenden County Democratic senator who is the chair of the Senate Economic Development, Housing and General Affairs Committee.
[H]ave you ever been automatically renewed on a consumer product or service contract beyond your original subscription without your clear knowledge or agreement, and/or tried unsuccessfully to terminate the contract? Join the club!
This is a massive consumer problem nationwide, and Vermont has now enacted the country’s strongest pro consumer law dealing with these “auto renewals,” and it applies to a wide breadth of contracts from subscriptions to memberships to warranties and much much more.
Starting July 1, companies — including the largest in the world — will no longer be allowed to bury automatic renewal provisions in the fine print of their Terms of Service, which they know most consumers neither read nor understand.
This provides a huge profit center for these companies (and a huge expense for their consumers), when the contract goes on and on, even though the consumer frequently no longer needs or wants the product. While some consumers will take the time and energy to cancel, they are frequently met with technological challenges, such as going to multiple links or giving over questionable information to unsubscribe.
Our new law, which the Senate Economic Development Committee worked hard to enact last year and defend against diluting this year, is based on transparency and equity. To have future contracts auto renew, companies will now have to get a second signature from the consumer agreeing to separate language in bold face font saying they knowingly and specifically agree to have their contracts auto renew.
Effectively, we have turned the auto renewal from an opt out system, where the consumer has the burden to navigate their way out of the contract, to one where the customer has to give true meaningful consent to be subject to auto renewal — an opt in system.
Our committee felt that if given a meaningful transparent choice, many consumers would choose to wait a year to see if they liked the product or service before agreeing to renew. We felt consumers could potentially avoid millions of dollars in payments for products/services they would otherwise want to discontinue.
There are some narrow limitations to the law, such as exempting financial institutions and insurance companies. To view the complete new auto renewal law see section 1 and 2 of Act 179.
If you wish more information, or have a complaint or concern with a bill you are paying, please contact the Attorney General’s Consumer Assistance Program, AGO.CAP@vermont.gov, the Vermont agency charged with enforcing our new law. Thank you very much.
