Senate Commerce Committee Statement to Assembly, No. 3892 (1R) — State of New Jersey (December 4, 2023)

Summary

A Senate Commerce Committee statement to Assembly, No. 3892 [First Reprint], State of New Jersey, dated December 4, 2023, reporting the bill favorably with committee amendments. As amended, the bill requires subscription service providers that sell health club services subscriptions online to give consumers an online cancellation option, such as a direct link or button. A violation is an unlawful practice under the consumer fraud act, punishable by a penalty of not more than $10,000 for a first offense and not more than $20,000 for subsequent offenses. The bill also lets a buyer cancel a health club services contract entered into online by telephone, regular mail or online, and is identical to Senate Bill No. 2952 as amended.

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SENATE COMMERCE COMMITTEE

STATEMENT TO

[First Reprint]

ASSEMBLY,
No. 3892

with
committee amendments

STATE
OF NEW JERSEY

DATED: DECEMBER
4, 2023

The Senate Commerce Committee reports favorably and
with committee amendments Assembly Bill No. 3892 (1R).

As
amended, this bill requires an online cancellation option for health club
services subscriptions and gym memberships that are entered into online.

Under
the bill, a subscription service provider selling health club services
subscriptions online is required to provide a consumer with an online option to
cancel the subscription. The subscription service provider is to provide to
any eligible consumer a direct link or button by which a consumer can cancel a
subscription to the service.

The
bill defines “subscription service provider” as a person who sells a
subscription service to a consumer online. In addition, the bill defines
“subscription service” as health club services provided on a subscription basis
in exchange for a reoccurring payment, including, but not limited to, a weekly,
monthly, or annual payment charged to and made by a consumer. “Consumer” is
defined as a resident of this State to whom a subscription service is sold
online.

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.

The
bill provides that if a health club services contract is entered into online,
the buyer is to be entitled to cancel the contract online. Under the bill, a
health club services contract may be cancelled before midnight of the third
operating day by telephone, regular mail, or online, if the health club
services contract was entered into online. The bill also provides that upon
the death or disability of the consumer or upon the consumer’s change of
personal residence to a location more than 25 miles from the health club, the
consumer may cancel the contract by telephone, regular mail, or online. Under
current law, a consumer is required to cancel a health club services contract
by written notice sent by registered or certified mail or by personal delivery
to the health club facility.

As amended and reported by the committee, Assembly
Bill No. 3892 (1R) is identical to Senate Bill No. 2952, as also amended and reported
by the committee on this date.

COMMITTEE AMENDMENTS

The committee amended the bill to limit the provisions
of the bill concerning online subscriptions to health club services
subscriptions and to make a technical change.

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