Assemblyman Moriarty Bill to Help Prevent Consumers From Getting Roped into Endless Auto-Renewals Clears Assembly Panel

A consumer protection measure passed by the Assembly Consumer Affairs Committee Thursday moves New Jersey closer to requiring notification to customers when a contract is to be automatically renewed.

Assembly Democrat Paul Moriarty sponsored the legislation.

The bill (A-1460) 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 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. However, the bill also provides that penalties would not be imposed if a seller allows a consumer to cancel the service contract at any time; provides proper notification to the consumer; and refunds the unearned portion of the contract subject to the automatic renewal provision.

The bill now goes to the Speaker for further review.