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Senate Commerce Committee Statement to Senate, No. 3877 (December 12, 2024)

Summary

Senate Commerce Committee statement to Senate, No. 3877 with committee amendments, State of New Jersey, dated December 12, 2024. The committee reports favorably and with committee amendments Senate Bill No. 3877, which as amended requires a cancellation option for any subscription service and establishes standards for the use of negative option features. The statement says the bill repeals and replaces current law and expands the term “subscription service” to apply to any subscription service provider. The committee amendments stipulate that the provisions do not apply to any service provided by a business or its affiliate licensed or regulated pursuant to State or federal law.

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“Senate Commerce Committee Statement to Senate, No. 3877 (December 12, 2024).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2024-12-12-scm-s3877-s1-183993d3c2/, SHA-256 07ec942c4a354575f64e24f827e88c031f26a77ea551078097b3a067444f1c36.

Full text

     SENATE COMMERCE COMMITTEE

                    STATEMENT TO

                  SENATE, No. 3877
                   with committee amendments



 STATE OF NEW JERSEY
                   DATED: DECEMBER 12, 2024

    The Senate Commerce Committee reports favorably and with
committee amendments Senate Bill No. 3877.
    As amended, this bill requires a cancellation option for any
subscription service and establishes certain standards pertaining to the
use of negative option features. Under current law, subscription
service providers of health club services are required to provide
consumers with an online cancellation option. This bill repeals and
replaces current law and expands the term “subscription service” to
apply to any subscription service provider. In addition, the bill
requires subscription service providers to make available to consumers
the option to cancel or terminate a subscription service using the same
medium through which the subscription service was activated or the
same medium in which the consumer is accustomed to interacting with
the subscription service provider, including, but not limited to, in
person, by telephone, by mail, by email, or online, in accordance with
the established billing terms and conditions of the subscription service.
Under the provisions of the bill, a subscription service provider that
makes available the option to cancel or terminate a subscription
service online, is to provide to any consumer, in an easily accessible
location, a direct link or button on the subscription service provider’s
Internet website through which a consumer can initiate termination of
the automatic renewal of the subscription service.
    Under the bill, a “negative option feature” is defined as a provision
within a subscription service offer or agreement in which a consumer’s
silence or failure to take an affirmative action to reject goods or
services or to cancel the agreement is interpreted by the subscription
service provider as acceptance of the subscription service. A
subscription service provider that utilizes a negative option feature as
part of the offer or agreement of a subscription service is not to:
misrepresent any material fact made while marketing; fail to clearly
and conspicuously disclose material terms prior to obtaining a
consumer’s billing information; fail to obtain a consumer’s express
informed consent before charging the consumer; and fail to provide a
simple mechanism to cancel and immediately halt charges.
    The committee amended the bill to stipulate that its provisions do
not apply to any service provided by a business or its affiliate where
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either the business or its affiliate is licensed or regulated pursuant to
State or federal law, including, but not by the Board of Public Utilities,
Federal Communications Commission, Federal Energy Regulatory
Commission, Department of Banking and Insurance or Division of
Consumer Affairs in the Department of Law and Public Safety.
    It is an unlawful practice for a subscription service provider to
violate the provisions of this bill. An unlawful practice under the
consumer fraud act is punishable by a monetary penalty of not more
than $10,000 for a first offense and not more than $20,000 for any
subsequent offense. In addition, violations may result in cease and
desist orders issued by the Attorney General, the assessment of
punitive damages, and the awarding of treble damages and costs to the
injured party. It is the intent of the sponsor to make it easier for
consumers to cancel their subscription services.

COMMITTEE AMENDMENTS
    The committee amended the bill to stipulate that its provisions do
not apply to any service provided by a business or its affiliate where
either the business or its affiliate is licensed or regulated pursuant to
State or federal law, including, but not by the Board of Public Utilities,
Federal Communications Commission, Federal Energy Regulatory
Commission, Department of Banking and Insurance or Division of
Consumer Affairs in the Department of Law and Public Safety.

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