BUSINESS + ECONOMY

New Utah law targets auto-renewal subscriptions

Apr 10, 2024, 6:00 PM | Updated: 7:46 pm

subscriptions...

Netflix may direct customers to stop paying for their subscriptions through Apple. (Chris Delmas/AFP/Getty Images via CNN Newsource)

(Chris Delmas/AFP/Getty Images via CNN Newsource)

SALT LAKE CITY — Did you forget to cancel your subscriptions before the “free trial” period ends? Now you’re on the hook for a monthly or yearly charge. A New Utah law shifts the responsibility of canceling a subscription away from the customer and onto the company.

American adults spend an average of $91 on subscription services each month. Nearly half have signed up for a free trial of a paid subscription, then have forgotten to cancel it, a CNET survey found.

State Sen. Todd Weiler, R-Woods Cross, speaks with Dave and Debbie about his bill — which is now a law — that aims to address unexpected subscription charges. Under this new law, subscription-based services are required to notify their customers before any renewals are charged.

Weiler’s co-sponsor on House Bill 174 was State Rep. Cheryl Acton, R-Salt Lake City.

The survey also found:

  • 12% of respondents claim their subscriptions are outside of their budget, but they pay for them anyway.
  • At $119 per month, millennials are the generation with the highest monthly subscription expenses. 
  • 24% say they think they’re overpaying for subscriptions.
  • 25% have had to cancel one or more subscriptions because prices increased and they could no longer afford them.

 

What does H.B. 174 actually enforce when it comes to subscriptions?

Weiler said the law requires a company to provide notice via email or text to a customer that an automatic renewal is approaching. Specifically, companies would have between 30 to 60 days ahead of the renewal deadline to tell subscribers about the impending charge.

“If the company providing the service doesn’t provide that, then the contract can be voided,” he said.

The notice the company sends must be “clear and conspicuous” to the subscriber so as not to fade into the fine print, Weiler added.

If companies refuse to comply with the new law, the  Utah Division of Consumer Protection can enforce it, Weiler said.

“What the law says is that the renewal be canceled if they don’t comply with the terms, then the renewal portion of the contract will be void.”

The new law applies to any company conducting business in Utah.

“A company can’t say, ‘Well, we’re based in New York so this law doesn’t apply to us.’ If they’re doing business in Utah, if they’re renewing — automatically renewing contracts for Utah customers — this will apply to them for the Utah customers. This wouldn’t apply out of state,” Weiler said.

The new law goes into effect on May 4, 2024.

Related: Utah lawmakers take aim at auto-renewing subscriptions


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New Utah law targets auto-renewal subscriptions