TRENTON, NJ  – A bill backed by Assemblywoman Angela McKnight (D-Jersey City/Bayonne) that would require notification to customers when a contract is to be automatically renewed was passed by the Assembly Consumer Affairs Committee Thursday.

This legislation is about promoting good business practices on behalf of New Jersey consumers,” said McKnight. “Automatic renewals can present a real financial burden for individuals who are struggling to make ends meet.”

The bill 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.

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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 of the Assembly for further review.

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