A consumer protection measure sponsored by Assembly Democrats Daniel R. Benson and Paul Moriarty was approved by an Assembly committee on Thursday, moving New Jersey closer to requiring notification to customers when a contract is to be renewed automatically.
“So many highly-used services out there today include automatic renewal provisions in their contracts,” said Benson (D-Mercer/Middlesex). “In an era of paperless billing and automatic charges to credit cards or bank accounts, consumers often get perpetually roped into extended and costly contracts. By requiring a clear display of the terms and advance notice prior to renewal, this bill will give consumers the opportunity to make more informed choices.”
The bill (A-2450) would require the seller of a service to disclose an automatic renewal provision clearly and conspicuously in the contract or contract offer. The measure also would require the seller to notify a consumer at least 30 days, but no more than 60 days, before a renewal cancellation deadline.
“Sometimes contracts are entered into a year, or even two years, before the automatic renewal clause kicks in,” said Moriarty (D-Gloucester/Camden). “This bill will protect consumers by ensuring that they have the opportunity to cancel any unwanted service prior to renewal of an additional term.”
A violation of the bill’s provisions would be considered an unlawful practice under the Consumer Fraud Act, punishable by a fine of up to $10,000 for a first offense and up to $20,000 for any subsequent offense.
The bill was advanced by the Assembly Consumer Affairs Committee, of which Moriarty is chair.