On the 1st of July 2018 a new law went into effect in the state of California (Senate Bill 313) that could affect any business selling subscriptions to customers who live in California.
The law was designed to protect California consumers from auto-bill situations they weren’t aware of.
Without going into too much of the legal jargon, here’s what the law demands:
- If you offer a free trial, you must provide a “clear and conspicuous explanation” of how much they’ll be charged after the trial and how they can cancel. This must happen during the trial sign up.
- If a consumer accepts an auto-bill agreement online, you must offer a way for that consumer to cancel online
- After a consumer accepts an auto-bill agreement, you must provide acknowledgment of the terms, the cancellation policy, and how to cancel in a way that can be “retained by the consumer”. I interpret that to mean email or direct mail (maybe SMS).
- If you offer a discount for a limited time ($1 trial or similar), you must get the consumers consent to charge their card at the full rate AFTER they’ve signed up for the promotional period. This is like a double-optin for the auto-charge.
What if my business is outside of California?
Great question. The law states it applies to “any business that makes an automatic renewal or continuous service offer to a consumer in this state”.
So, that’s basically anyone who sells anything online. 🙂
We’ll be updating our stuff very soon.
I suggest you do the same.