Idaho Subscription Law Signed by Governor – Consumer Protection

United States: Idaho Subscription Law Signed by Governor

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On March 23, Governor Brad Little signed into law the Idaho Subscription Bill (“Idaho Subscription Law”). Idaho’s subscription law will regulate subscription offers and automatic renewals marketed to consumers beginning January 1, 2023. The law adds provisions to protect consumers from unfair and deceptive marketing practices involving the Cancellation of Subscriptions and Other Auto-Renewal Plans. Sellers who want to offer subscription services or other auto-renewing plans to Idaho consumers must now prepare to comply with the new law.

Automatic renewals as defined by Idaho subscription law

Auto-renewing subscription contracts are arrangements entered into via the Internet in which paid subscriptions or purchase contracts are automatically renewed for a specified price at the end of a specified term on a recurring basis, unless the consumer terminates the contract. If contracts are renewed for terms of 12 months or longer, they are called “automatic extended subscription renewals” under Idaho’s subscription law.

Clear and visible disclosure of renewal terms

Under the terms of the new law, merchants will be required to clearly and prominently disclose: 1) the terms of the auto-renewal offer; and 2) the methods consumers can use to cancel subscriptions. At a minimum, marketers should implement a free online method of cancellation and allow consumers to cancel the same way they originally subscribed. Phone numbers are an acceptable method of cancellation as long as the numbers are toll-free and prominently displayed in the subscription disclosure.

For extended subscription auto-renewal offers, marketers must notify consumers prior to the applicable auto-renewal date. Idaho’s subscription law requires marketers to send these notices to consumers 30 to 60 days before renewal dates. For example, if a consumer purchased a 12-month subscription on 1/1/22, the renewal notice must be sent between 2/11/22 and 2/12/22. In addition to the disclosure requirements set out above, such notices must clearly and prominently:

  1. Describe the goods or services to be delivered;

  2. Indicate the subscription price;

  3. Inform the consumer that the goods or services will be provided unless the consumer informs the seller that the goods or services are not wanted; and

  4. Provide the consumer with at least two (2) cancellation methods.

Federal rules must also be followed

Please note that sellers must comply with the Federal Trade Commission‘s (“FTC”) automatic renewal rules, as well as Idaho’s subscription law. The FTC requires that sign-up processes for subscriptions be clear and visible and that companies obtain consumers’ express informed consent to the terms of the program. For subscription offers to be considered clear and visible, marketers must disclose: 1) fee amount or range; 2) if applicable, any increase in costs after the end of a trial period; 3) the recurring expense basis; and 4) the dates on which the charges will be submitted for payment. Express informed consent to the renewal terms can be obtained from consumers when they accept (tick one box) the auto-renewal feature separately from other parties to the transaction. In addition, consumers should be able to easily cancel their subscriptions. If a seller’s subscription plan fails to meet any of the FTC’s requirements, the company will be subject to regulatory action, including possible civil penalties.

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The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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