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| 9 | 9 | | S TATE OF RHODE IS LAND |
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| 10 | 10 | | IN GENERAL ASSEMBLY |
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| 11 | 11 | | JANUARY SESSION, A.D. 2023 |
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| 12 | 12 | | ____________ |
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| 13 | 13 | | |
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| 14 | 14 | | A N A C T |
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| 15 | 15 | | RELATING TO COMMERCI AL LAW -- GENERAL REGULATORY PROVISION S -- |
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| 16 | 16 | | UNFAIR SALES PRACTICES |
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| 17 | 17 | | Introduced By: Senators Euer, Felag, Lawson, DiMario, Acosta, Ruggerio, Lauria, Cano, |
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| 18 | 18 | | Quezada, and Zurier |
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| 19 | 19 | | Date Introduced: February 16, 2023 |
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| 20 | 20 | | Referred To: Senate Commerce |
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| 21 | 21 | | |
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| 22 | 22 | | |
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| 23 | 23 | | It is enacted by the General Assembly as follows: |
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| 24 | 24 | | SECTION 1. Chapter 16-13 of the General Laws entitled "Unfair Sales Practices" is hereby 1 |
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| 25 | 25 | | amended by adding thereto the following section: 2 |
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| 26 | 26 | | 16-13-22. Automatic subscription renewal or automatic renewal contract - Notice 3 |
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| 27 | 27 | | required. 4 |
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| 28 | 28 | | (a) For purposes of this section, “automatic subscription renewal” or “automatic renewal 5 |
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| 29 | 29 | | offer” means a plan or arrangement in which a paid subscription or purchasing agreement is 6 |
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| 30 | 30 | | automatically renewed at the end of a definite term for a subsequent term or on a continuous or 7 |
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| 31 | 31 | | recurring basis. 8 |
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| 32 | 32 | | (b) It is unlawful for any business that makes an automatic renewal offer or continuous 9 |
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| 33 | 33 | | service to offer a consumer in this state to do any of the following: 10 |
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| 34 | 34 | | (1) Fail to present the automatic renewal offer terms or continuous service offer terms in a 11 |
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| 35 | 35 | | clear and conspicuous manner before the subscription or purchasing agreement is fulfilled and in 12 |
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| 36 | 36 | | visual proximity, or, in the case of an offer conveyed by voice, in temporal proximity, to the request 13 |
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| 37 | 37 | | for consent to the offer. If the offer also includes a free gift or trial, the offer shall include a clear 14 |
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| 38 | 38 | | and conspicuous explanation of the price that will be charged after the trial ends or the manner in 15 |
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| 39 | 39 | | which the subscription or purchasing agreement pricing will change upon conclusion of the trial; 16 |
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| 40 | 40 | | (2) Charge the consumer’s credit or debit card, or the consumer’s account with a third 17 |
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| 41 | 41 | | party, for an automatic renewal or continuous service without first obtaining the consumer’s 18 |
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| 42 | 42 | | |
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| 43 | 43 | | |
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| 45 | 45 | | affirmative consent to the agreement containing the automatic renewal offer terms or continuous 1 |
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| 46 | 46 | | service offer terms, including the terms of an automatic renewal offer or continuous service offer 2 |
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| 47 | 47 | | that is made at a promotional or discounted price for a limited period of time; 3 |
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| 48 | 48 | | (3) Fail to provide an acknowledgement that includes the automatic renewal offer terms or 4 |
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| 49 | 49 | | continuous service offer terms, cancellation policy, and information regarding how to cancel in a 5 |
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| 50 | 50 | | manner that is capable of being retained by the consumer. If the automatic renewal offer or 6 |
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| 51 | 51 | | continuous service offer includes a free gift or trial, the business shall also disclose in the 7 |
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| 52 | 52 | | acknowledgement how to cancel, and allow the consumer to cancel, the automatic renewal or 8 |
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| 53 | 53 | | continuous service before the consumer pays for the goods or services; or 9 |
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| 54 | 54 | | (4) Fail to provide a consumer with a notice, as may be required by subsection (b)(1) of 10 |
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| 55 | 55 | | this section, that clearly and conspicuously states all of the following: 11 |
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| 56 | 56 | | (i) That the automatic renewal or continuous service will automatically renew unless the 12 |
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| 57 | 57 | | consumer cancels; 13 |
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| 58 | 58 | | (ii) The length and any additional terms of the renewal period; 14 |
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| 59 | 59 | | (iii) One or more methods by which a consumer can cancel the automatic renewal or 15 |
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| 60 | 60 | | continuous service; 16 |
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| 61 | 61 | | (iv) If the notice is sent electronically, the notice shall include either a link that directs the 17 |
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| 62 | 62 | | consumer to the cancellation process, or another reasonably accessible electronic method that 18 |
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| 63 | 63 | | directs the consumer to the cancellation process if no link exists; and 19 |
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| 64 | 64 | | (v) Contact information for the business. 20 |
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| 65 | 65 | | (c) A business that shall provide a consumer with a notice as specified in subsection (b) of 21 |
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| 66 | 66 | | this section if either of the following is true; provided that, if an automatic renewal offer or a 22 |
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| 67 | 67 | | continuous service offer requires a notice under both subsections (c)(1) and (c)(2) of this section, 23 |
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| 68 | 68 | | only the notice specified in subsection (c)(2) of this section shall be required: 24 |
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| 69 | 69 | | (1) The consumer accepted a free gift or trial, lasting for more than thirty-one (31) days, 25 |
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| 70 | 70 | | that was included in an automatic renewal offer or continuous service offer or the consumer 26 |
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| 71 | 71 | | accepted an automatic renewal offer or continuous service offer at a promotional or discounted 27 |
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| 72 | 72 | | price, and the applicability of that price was more than thirty-one (31) days: 28 |
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| 73 | 73 | | (i) The notice shall be provided at least three (3) days before and at most twenty-one (21) 29 |
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| 74 | 74 | | days before the expiration of the predetermined period of time for which the free gift or trial, or 30 |
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| 75 | 75 | | promotional or discounted price, applies. 31 |
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| 76 | 76 | | (ii) An offer shall be exempt from the requirements under this subsection if the consumer 32 |
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| 77 | 77 | | does not enter into the contract electronically and the business has not collected or maintained the 33 |
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| 78 | 78 | | consumer’s valid email address, phone number, or another means of notifying the consumer 34 |
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| 79 | 79 | | |
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| 80 | 80 | | |
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| 82 | 82 | | electronically. 1 |
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| 83 | 83 | | (iii) For purposes of this section, “free gift” does not include a free promotional item or 2 |
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| 84 | 84 | | gift given by the business that differs from the subscribed product; or 3 |
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| 85 | 85 | | (2) The consumer accepted an automatic renewal offer or continuous service offer with an 4 |
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| 86 | 86 | | initial term of one year or longer, that automatically renews unless the consumer cancels the 5 |
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| 87 | 87 | | automatic renewal or continuous service. In this case, the notice shall be provided at least fifteen 6 |
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| 88 | 88 | | (15) days and not more than forty-five (45) days before the automatic renewal offer or continuous 7 |
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| 89 | 89 | | service offer renews. 8 |
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| 90 | 90 | | (d) A business that makes an automatic renewal offer or continuous service offer shall 9 |
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| 91 | 91 | | provide a toll-free telephone number, electronic mail address, a postal address if the seller directly 10 |
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| 92 | 92 | | bills the consumer, or it shall provide another cost-effective, timely, and easy-to-use mechanism 11 |
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| 93 | 93 | | for cancellation that shall be described in the acknowledgement specified in subsection (b)(3) of 12 |
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| 94 | 94 | | this section. 13 |
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| 95 | 95 | | (e)(1) In addition to the requirements of subsection (c) of this section, a business that allows 14 |
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| 96 | 96 | | a consumer to accept an automatic renewal or continuous service offer online shall allow a 15 |
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| 97 | 97 | | consumer to terminate the automatic renewal or continuous service exclusively online, at will, and 16 |
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| 98 | 98 | | without engaging any further steps that obstruct or delay the consumer’s ability to terminate the 17 |
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| 99 | 99 | | automatic renewal or continuous service immediately. The business shall provide a method of 18 |
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| 100 | 100 | | termination that is online in the form of either of the following: 19 |
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| 101 | 101 | | (i) A prominently located direct link or button which may be located within either a 20 |
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| 102 | 102 | | customer account or profile, or within either device or user settings; or 21 |
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| 103 | 103 | | (ii) By an immediately accessible termination email formatted and provided by the business 22 |
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| 104 | 104 | | that a consumer can send to the business without additional information. 23 |
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| 105 | 105 | | (2) The termination requirements of this subsection apply to the automatic renewal terms 24 |
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| 106 | 106 | | and continuous service terms of the contract and the remaining provisions of the contract continue 25 |
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| 107 | 107 | | to be governed by all applicable laws and regulations. 26 |
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| 108 | 108 | | (3) Notwithstanding subsection (e)(1) of this subsection, a business may require a 27 |
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| 109 | 109 | | consumer to enter account information or otherwise authenticate online before termination of the 28 |
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| 110 | 110 | | automatic renewal or continuous service online if the consumer has an account with the business. 29 |
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| 111 | 111 | | A consumer who is unwilling or unable to enter account information or otherwise authenticate 30 |
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| 112 | 112 | | online before termination of the automatic renewal or continuous service online shall not be 31 |
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| 113 | 113 | | precluded from authenticating or terminating the automatic renewal or continuous service offline 32 |
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| 114 | 114 | | using another method pursuant to subsection (d) of this section. 33 |
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| 115 | 115 | | (f) In the case of a material change in the terms of the automatic renewal or continuous 34 |
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| 116 | 116 | | |
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| 117 | 117 | | |
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| 119 | 119 | | service that has been accepted by a consumer in this state, the business shall provide the consumer 1 |
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| 120 | 120 | | with a clear and conspicuous notice of the material change and provide information regarding how 2 |
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| 121 | 121 | | to cancel in a manner that is capable of being retained by the consumer. 3 |
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| 122 | 122 | | (g) The requirements of this section shall apply only prior to the completion of the initial 4 |
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| 123 | 123 | | order for the automatic renewal or continuous service, except as follows: 5 |
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| 124 | 124 | | (1) The requirements in subsections (b)(3) and (b)(4) of this section may be fulfilled after 6 |
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| 125 | 125 | | completion of the initial order; 7 |
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| 126 | 126 | | (2) The requirements of subsection (c) of this section may be fulfilled after completion of 8 |
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| 127 | 127 | | the initial order. 9 |
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| 128 | 128 | | (3) The requirement in subsection (f) of this section shall be fulfilled prior to 10 |
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| 129 | 129 | | implementation of the material change. 11 |
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| 140 | 137 | | EXPLANATION |
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| 141 | 138 | | BY THE LEGISLATIVE COUNCIL |
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| 142 | 139 | | OF |
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| 143 | 140 | | A N A C T |
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| 144 | 141 | | RELATING TO COMMERCI AL LAW -- GENERAL REGULATORY P ROVISIONS -- |
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| 145 | 142 | | UNFAIR SALES PRACTICES |
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| 146 | 143 | | *** |
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| 147 | 144 | | This act would require businesses that offer automatic subscription renewals or continuous 1 |
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| 148 | 145 | | offers to provide notice to the consumer prior to the automatic renewal of such subscription, provide 2 |
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| 149 | 146 | | clear and conspicuous cancellation information with such notice, and provide notice in the manner 3 |
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| 150 | 147 | | in which the consumer entered into the contract for automatic subscription renewal in the first 4 |
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| 151 | 148 | | instance. This act would also require businesses that offer automatic subscription renewals or 5 |
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| 152 | 149 | | continuous service offers to provide contract terms to the consumer in a clear and conspicuous 6 |
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| 153 | 150 | | manner, prior to the consumer’s engagement in the contract for automatic subscription renewals. 7 |
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| 154 | 151 | | This act would take effect on January 1, 2024. 8 |
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| 155 | 152 | | ======== |
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