A consumer protection measure sponsored by Assembly Democrats Dan Benson, Paul Moriarty and John Wisniewski was approved by the Assembly on Thursday, moving New Jersey closer to requiring notification to customers when a contract is to be automatically renewed.
“So many highly-used services out there today include automatic renewal clauses 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 these terms to be clearly displayed and advance notice before renewal, this bill will give consumers the opportunity to make more informed choices for themselves.”
This bill (A-1004) establishes notification standards regarding service contracts that contain automatic renewal provisions. A service contract is defined as a written contract for the performance of service, maintenance or repair over a fixed period of time in connection with real property.
“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.”
“Automatic renewal clauses trap consumers into a perpetual contract,” said Wisniewski (D-Middlesex). “Contract renewal terms must be made clear to the consumer, giving them an opportunity to review the contract and make an informed decision to continue or to terminate, if necessary.”
The bill, which passed the Assembly 69-3-0, awaits Senate consideration.