HAMILTON, NJ -- Legislation by Hamilton Assemblyman Dan Benson to protect consumers from being stuck in unwanted contracts was passed by the Assembly Consumer Affairs Committee earlier this month. The bill, if signed into law, would require that customers be notified when a contract is to be automatically renewed.
“So many highly-used services include automatic renewal provisions 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 a clear display of the terms and advance notice prior to renewal, this bill will give consumers the opportunity to make more informed choices.”
The measure would also require the seller to notify a consumer at least 30 days, but no more than 60 days, before a renewal cancellation deadline. Violating that proposed law would be punishable by a fine of up to $10,000 for a first offense and up to $20,000 for any subsequent offense under the Consumer Fraud Act.
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.
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