House Bill 103 Third Edition, Automatic Renewal of Contracts, North Carolina (2021)
Summary
House Bill 103, Third Edition, in the General Assembly of North Carolina, Session 2021, with the short title Automatic Renewal of Contracts. The page prints Committee Substitute Favorable 3/24/21 and Committee Substitute #2 Favorable 4/27/21. Section 1 rewrites § 75-41 on contracts with automatic renewal clauses, requiring a disclosure statement covering renewal terms and charges, the consumer's affirmative consent before charging for an automatic renewal, and online cancellation for a consumer who enters into a contract online. Section 2 states that the act becomes effective January 1, 2022 and applies to contracts entered into on or after that date.
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“House Bill 103 Third Edition, Automatic Renewal of Contracts, North Carolina (2021).”
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GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2021
H 3
HOUSE BILL 103
Committee Substitute Favorable 3/24/21
Committee Substitute #2 Favorable 4/27/21
Short Title: Automatic Renewal of Contracts. (Public)
Sponsors:
Referred to:
February 19, 2021
1 A BILL TO BE ENTITLED
2 AN ACT TO AMEND THE REQUIREMENTS FOR CERTAIN AUTOMATICALLY
3 RENEWING CONSUMER CONTRACTS.
4 The General Assembly of North Carolina enacts:
5 SECTION 1. G.S. 75-41 reads as rewritten:
6 "§ 75-41. Contracts with automatic renewal clauses.
7 (a) Any person engaged in commerce that sells, leases, or offers to sell or lease, any
8 products or services to a consumer pursuant to a contract where the contract automatically renews
9 unless the consumer cancels the contract, that contains an automatic renewal provision for a term
10 of more than one month shall do all of the following:
11 (1) Disclose the automatic renewal clause clearly and conspicuously in the
12 contract or contract offer.Provide a disclosure statement that clearly and
13 conspicuously provides notice of all of the following:
14 a. That the contract will be automatically renewed if the consumer agrees
15 to the contract.
16 b. The length of the initial term of the contract and the length of each
17 renewal period under the contract.
18 c. The amount to be charged to the consumer for the initial term of the
19 contract and the amount to be charged to the consumer for any renewal
20 periods, if known.
21 d. If any terms of the contract will change upon contract renewal, a list
22 and explanation of those terms.
23 e. An electronic mail address, mailing address, toll-free telephone
24 number, or another cost-effective, timely, and easy-to-use mechanism
25 that the consumer may use to terminate the automatic renewal. A
26 consumer who enters into a contract online shall be permitted to cancel
27 the contract online.
28 (1a) Obtain the consumer's affirmative consent before charging the consumer for
29 an automatic renewal.
30 (2) Disclose clearly and conspicuously how to cancel the contract in the initial
31 contract, contract offer, or with delivery of products or services.
32 (3) For any automatic renewal exceeding 60 days, of six months or more, provide
33 written notice to the consumer by personal delivery, electronic mail, or
34 first-class mail, or any other form of notice agreed to by the consumer, at least
35 15 days but no earlier than 45 60 days before the date the contract is to be
*H103-v-3*
General Assembly Of North Carolina Session 2021
1 automatically renewed, stating the date on which the contract is scheduled to
2 automatically renew and notifying the consumer that the contract will
3 automatically renew unless it is cancelled by the consumer prior to that date.
4 (4) If the terms of the contract will change upon the automatic renewal of the
5 contract, disclose the changing terms of the contract clearly and conspicuously
6 on the notification in at least 12 point type and in bold print."
7 …
8 (d) This section does not apply to insurers licensed under Chapter 58 of the General
9 Statutes, or to banks, trust companies, savings and loan associations, savings banks, or credit
10 unions licensed or organized under the laws of any state or the United States, or any foreign bank
11 maintaining a branch or agency licensed under the laws of the United States, or any subsidiary
12 or affiliate thereof, nor does this section apply to any entity subject to regulation by the Federal
13 Communications Commission under Title 47 of the United States Code or by the North Carolina
14 Utilities Commission under Chapter 62 of the General Statutes, or to any entity doing business
15 directly or through an affiliate pursuant to a franchise, license, certificate, or other authorization
16 issued by a political subdivision of the State or an agency thereof.
17 …
18 (f) For purposes of this section, the term "automatic renewal provision" means a
19 provision under which a contract is automatically renewed at the end of a definite term for a
20 subsequent term of more than one month. Such renewal is effective unless the consumer gives
21 notice to the seller of the consumer's intention to terminate the contract."
22 SECTION 2. This act becomes effective January 1, 2022, and applies to contracts
23 entered into on or after that date.
Page 2 House Bill 103-Third Edition
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