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Bill Analysis - House Bill 103 Automatic Renewal of Contracts, Senate Commerce and Insurance (June 8, 2021)

Summary

Bill analysis of House Bill 103, Automatic Renewal of Contracts, 2021-2022 General Assembly, prepared for the Senate Commerce and Insurance committee and dated June 8, 2021, as of the Third Edition. It lists Stevens as the introducer and Bill Patterson as the preparer. The overview says the bill would amend disclosure and notice requirements for consumer contracts with an automatic renewal clause and require that a consumer who enters into such a contract online be permitted to cancel online. It describes replacing the notice requirement for terms exceeding 60 days with notice, not sooner than 15 days and not later than 60 days before renewal, for a term of 6 months or more, and an effective date of January 1, 2022.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

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“Bill Analysis - House Bill 103 Automatic Renewal of Contracts, Senate Commerce and Insurance (June 8, 2021).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2021-06-24-summary-103-5a3cc667c8/, SHA-256 156136404f2b14ffef9be0384dd5f00fbddded01266980e403d98f1ce69087e2.

Full text

                                                     HOUSE BILL 103:
                                                     Automatic Renewal of Contracts.
      2021-2022 General Assembly
     Committee:     Senate Commerce and Insurance. If favorable, Date:            June 8, 2021
                    re-refer to Judiciary. If favorable, re-refer to
                    Rules and Operations of the Senate
     Introduced by: Rep. Stevens                                     Prepared by: Bill Patterson
     Analysis of:   Third Edition                                                 Committee Co-Counsel

     OVERVIEW: House Bill 103 would amend the disclosure and notice requirements for consumer
     contracts with an automatic renewal clause and require that a consumer who enters into such a
     contract online be permitted to cancel the contract online.

     CURRENT LAW: G.S. 75-41 requires a person who sells, leases, or offers to sell or lease any goods or
     services to a consumer under a contract containing an automatic renewal clause to clearly and
     conspicuously disclose: 1) the automatic renewal clause; 2) any contract terms that will change upon
     renewal; and 3) how to cancel the contract. If the term of an automatic renewal exceeds 60 days, the
     consumer must be notified, not sooner than 15 days and not later than 45 days before the date of the
     automatic renewal, that the contract will automatically renew on that date unless it is canceled before then.
     A violation of any of these requirements renders the automatic renewal clause void and unenforceable.
     BILL ANALYSIS: House Bill 103 would amend G.S. 75-41 to:
            •     Make it applicable to contracts that are automatically renewed for a term of more than one month.
            •     Require the consumer to be provided with a disclosure statement clearly and conspicuously
                  providing notice of all of the following:
                      o That the contract will be automatically renewed if the consumer agrees to the contract.
                      o The length of the initial term of the contract and of each renewal period under the contract.
                      o The amount the consumer will be charged initially and for any renewal periods, if known.
                      o A list and explanation of any terms that will change upon the contract renewal.
                      o Contact information for the consumer to use to terminate the automatic renewal, or another
                          cost-effective, timely, and easy-to-use way to terminate the renewal.
            •     Require that a consumer who enters into a contract online be permitted to cancel the contract
                  online.
            •     Require the consumer's affirmative consent before charging the consumer for an automatic
                  renewal.
            •     Replace the current notice requirement applicable to contracts that automatically renew for a term
                  exceeding 60 days with a requirement that if a contract will automatically renew for a term of 6
                  months or more, the consumer must be notified, not sooner than 15 days and not later than 60 days
                  before the date of automatic renewal, that the contract will renew on that date unless it is canceled
                  before then.
     EFFECTIVE DATE: This act would become effective January 1, 2022 and would apply to contracts
     entered into on or after that date.
     Hillary Woodard, counsel to House Judiciary 2, substantially contributed to this summary.
                                                                                                                                                             Legislative Analysis
     Jeffrey Hudson
                                                                                                                                                                   Division
         Director                                           H103-SMTG-77(e3)-v-1                                                                               919-733-2578
This bill analysis was prepared by the nonpartisan legislative staff for the use of legislators in their deliberations and does not constitute an official statement of legislative intent.

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