103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB3478

 

Introduced 2/17/2023, by Rep. Matt Hanson

 

SYNOPSIS AS INTRODUCED:
 
815 ILCS 601/10
815 ILCS 601/12 new

    Amends the Automatic Contract Renewal Act. Provides for additional violations, notification, and cancellation requirements for a person, firm, partnership, association, or corporation that makes an automatic renewal offer or continuous service offer to a consumer. Provides that a person, firm, partnership, association, or corporation that makes an automatic renewal offer or continuous service offer shall provide a toll-free telephone number, email address, a postal address if the seller directly bills the consumer, or it shall provide another cost-effective, timely, and easy-to-use mechanism for cancellation.


LRB103 27621 SPS 53997 b

 

 

A BILL FOR

 

HB3478LRB103 27621 SPS 53997 b

1    AN ACT concerning business.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Automatic Contract Renewal Act is amended
5by changing Section 10 and adding Section 12 as follows:
 
6    (815 ILCS 601/10)
7    Sec. 10. Exemptions from liability Automatic renewal;
8requirements.
9    (a) (Blank). Any person, firm, partnership, association,
10or corporation that sells or offers to sell any products or
11services to a consumer pursuant to a contract, where such
12contract automatically renews unless the consumer cancels the
13contract, shall disclose the automatic renewal clause clearly
14and conspicuously in the contract, including the cancellation
15procedure.
16    (b) (Blank). Any person, firm, partnership, association,
17or corporation that sells or offers to sell any products or
18services to a consumer pursuant to a contract, where such
19contract term is a specified term of 12 months or more, and
20where such contract automatically renews for a specified term
21of more than one month unless the consumer cancels the
22contract, shall notify the consumer in writing of the
23automatic renewal. Written notice shall be provided to the

 

 

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1consumer no less than 30 days and no more than 60 days before
2the cancellation deadline pursuant to the automatic renewal
3clause. Such written notice shall disclose clearly and
4conspicuously:
5        (i) that unless the consumer cancels the contract it
6    will automatically renew; and
7        (ii) where the consumer can obtain details of the
8    automatic renewal provision and cancellation procedure
9    (for example, by contacting the business at a specified
10    telephone number or address or by referring to the
11    contract).
12    (b-5) (Blank). A person, firm, partnership, association,
13or corporation that makes an automatic renewal offer or
14continuous service offer online shall provide a toll-free
15telephone number, electronic mail address, a postal address if
16the seller directly bills the consumer, or another
17cost-effective, timely, and easy-to-use mechanism for
18cancellation that shall be described in the notice required in
19subsection (b). A consumer who accepts an automatic renewal or
20continuous service offer online must be allowed to terminate
21the automatic renewal or continuous service exclusively
22online, which may include a termination email formatted and
23provided by the business that a consumer can send to the
24business without additional information.
25    (c) A person, firm, partnership, association, or
26corporation will not be liable for a violation of this Act or

 

 

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1the Consumer Fraud and Deceptive Business Practices Act if
2such person, firm, partnership, association, or corporation
3demonstrates that, as part of its routine business practice:
4        (i) it has established and implemented written
5    procedures to comply with this Act and enforces compliance
6    with the procedures;
7        (ii) any failure to comply with this Act is the result
8    of error; and
9        (iii) where an error has caused a failure to comply
10    with this Act, it provides a full refund or credit for all
11    amounts billed to or paid by the consumer from the date of
12    the renewal until the date of the termination of the
13    account, or the date of the subsequent notice of renewal,
14    whichever occurs first.
15(Source: P.A. 102-517, eff. 1-1-22.)
 
16    (815 ILCS 601/12 new)
17    Sec. 12. Automatic contracts; requirements.
18    (a) It is unlawful for a person, firm, partnership,
19association, or corporation that makes an automatic renewal
20offer or continuous service offer to a consumer in this State
21to do any of the following:
22        (1) Fail to present the automatic renewal offer terms
23    or continuous service offer terms in a clear and
24    conspicuous manner before the subscription or purchasing
25    agreement is fulfilled and in visual proximity, or, in the

 

 

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1    case of an offer conveyed by voice, in temporal proximity,
2    to the request for consent to the offer. If the offer also
3    includes a free gift or trial, the offer shall include a
4    clear and conspicuous explanation of the price that will
5    be charged after the trial ends or the manner in which the
6    subscription or purchasing agreement pricing will change
7    upon conclusion of the trial.
8        (2) Charge the consumer's credit or debit card, or the
9    consumer's account with a third party, for an automatic
10    renewal or continuous service without first obtaining the
11    consumer's affirmative consent to the agreement containing
12    the automatic renewal offer terms or continuous service
13    offer terms, including the terms of an automatic renewal
14    offer or continuous service offer that is made at a
15    promotional or discounted price for a limited period of
16    time.
17        (3) Fail to provide an acknowledgment that includes
18    the automatic renewal offer terms or continuous service
19    offer terms, cancellation policy, and information
20    regarding how to cancel in a manner that is capable of
21    being retained by the consumer. If the automatic renewal
22    offer or continuous service offer includes a free gift or
23    trial, the person, firm, partnership, association, or
24    corporation shall also disclose in the acknowledgment how
25    to cancel, and allow the consumer to cancel, the automatic
26    renewal or continuous service before the consumer pays for

 

 

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1    the goods or services.
2        (4) Fail to provide a consumer with a notice, as may be
3    required by subsection (b), that clearly and conspicuously
4    states all of the following:
5            (A) that the automatic renewal or continuous
6        service will automatically renew unless the consumer
7        cancels;
8            (B) the length and any additional terms of the
9        renewal period;
10            (C) one or more methods by which a consumer can
11        cancel the automatic renewal or continuous service;
12            (D) if the notice is sent electronically, the
13        notice shall include either a link that directs the
14        consumer to the cancellation process, or another
15        reasonably accessible electronic method that directs
16        the consumer to the cancellation process if no link
17        exists; and
18            (E) the contact information for the person, firm,
19        partnership, association, or corporation.
20    (b) A person, firm, partnership, association, or
21corporation shall provide a consumer with a notice as
22specified in paragraph (4) of subsection (a) if either of the
23following is true, provided that if an automatic renewal offer
24or a continuous service offer requires a notice under both
25paragraphs (1) and (2), only the notice specified in paragraph
26(2) shall be required:

 

 

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1        (1) The consumer accepted a free gift or trial,
2    lasting for more than 31 days, that was included in an
3    automatic renewal offer or continuous service offer or the
4    consumer accepted an automatic renewal offer or continuous
5    service offer at a promotional or discounted price, and
6    the applicability of that price was more than 31 days.
7            (A) The notice shall be provided at least 3 days
8        before and at most 21 days before the expiration of the
9        predetermined period of time for which the free gift
10        or trial, or promotional or discounted price, applies.
11            (B) An offer shall be exempt from the requirements
12        under this paragraph if the consumer does not enter
13        into the contract electronically and the person, firm,
14        partnership, association, or corporation has not
15        collected or maintained the consumer's valid email
16        address, phone number, or another means of notifying
17        the consumer electronically.
18            (C) As used in this paragraph, "free gift" does
19        not include a free promotional item or gift given by
20        the person, firm, partnership, association, or
21        corporation that differs from the subscribed product.
22        (2) The consumer accepted an automatic renewal offer
23    or continuous service offer with an initial term of one
24    year or longer, that automatically renews unless the
25    consumer cancels the automatic renewal or continuous
26    service. In this case, the notice shall be provided at

 

 

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1    least 15 days and not more than 45 days before the
2    automatic renewal offer or continuous service offer
3    renews.
4    (c) A person, firm, partnership, association, or
5corporation that makes an automatic renewal offer or
6continuous service offer shall provide a toll-free telephone
7number, email address, a postal address if the seller directly
8bills the consumer, or it shall provide another
9cost-effective, timely, and easy-to-use mechanism for
10cancellation that shall be described in the acknowledgment
11specified in paragraph (3) of subsection (a).
12    (d)(1) In addition to the requirements of subsection (b),
13a person, firm, partnership, association, or corporation that
14allows a consumer to accept an automatic renewal or continuous
15service offer online shall allow a consumer to terminate the
16automatic renewal or continuous service exclusively online, at
17will, and without engaging any further steps that obstruct or
18delay the consumer's ability to terminate the automatic
19renewal or continuous service immediately. The person, firm,
20partnership, association, or corporation shall provide a
21method of termination that is online in the form of either of
22the following:
23            (A) a prominently located direct link or button
24        which may be located within either a customer account
25        or profile, or within either device or user settings;
26        or

 

 

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1            (B) by an immediately accessible termination email
2        formatted and provided by the person, firm,
3        partnership, association, or corporation that a
4        consumer can send without additional information.
5    (2) The termination requirements of this subsection apply
6to the automatic renewal terms and continuous service terms of
7the contract and the remaining provisions of the contract
8continue to be governed by all applicable laws and
9regulations.
10    (3) Notwithstanding paragraph (1), a person, firm,
11partnership, association, or corporation may require a
12consumer to enter account information or otherwise
13authenticate online before termination of the automatic
14renewal or continuous service online if the consumer has an
15account with the person, firm, partnership, association, or
16corporation. A consumer who is unwilling or unable to enter
17account information or otherwise authenticate online before
18termination of the automatic renewal or continuous service
19online shall not be precluded from authenticating or
20terminating the automatic renewal or continuous service
21offline using another method as described in subsection (c).
22    (e) In the case of a material change in the terms of the
23automatic renewal or continuous service that has been accepted
24by a consumer in this State, the person, firm, partnership,
25association, or corporation shall provide the consumer with a
26clear and conspicuous notice of the material change and

 

 

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1provide information regarding how to cancel in a manner that
2is capable of being retained by the consumer.
3    (f) The requirements of this Act shall apply only prior to
4the completion of the initial order for the automatic renewal
5or continuous service, except as follows:
6        (1) the requirements in paragraphs (3) and (4) of
7    subsection (a) may be fulfilled after completion of the
8    initial order;
9        (2) the requirements in subsection (b) may be
10    fulfilled after completion of the initial order; or
11        (3) the requirement in subsection (e) shall be
12    fulfilled prior to implementation of the material change.