Texas 2021 - 87th Regular

Texas House Bill HB2259 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	~~87R20577~~ MLH-D
	1	+	87R4318 MLH-D
2	2		By: Guerra H.B. No. 2259
3		-	Substitute the following for H.B. No. 2259:
4		-	By: Turner of Tarrant C.S.H.B. No. 2259
5	3
6	4
7	5		A BILL TO BE ENTITLED
8	6		AN ACT
9		-	relating to requirements for subscription service contracts;
10		-	providing a civil penalty.
	7	+	relating to requirements for subscription service contracts.
11	8		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	9		SECTION 1. Title 12, Business & Commerce Code, is amended by
13	10		adding Chapter 608 to read as follows:
14	11		CHAPTER 608. SUBSCRIPTION SERVICE CONTRACTS
15	12		Sec. 608.001. DEFINITIONS. In this chapter:
16	13		(1) "Automatic renewal clause" means a provision of a
17		-	contract that extends the term of or renews a contract for a period
18		-	of at least one month if the consumer does not take a specified
19		-	action.
	14	+	contract that extends the term of or renews a contract if the
	15	+	consumer does not take a specified action.
20	16		(2) "Consumer" means a person who acquires goods or
21	17		services for personal, family, or household purposes.
22	18		(3) "Service provider" means a business that provides
23	19		a service to a consumer.
24	20		(4) "Subscription service" means a service provided by
25	21		a service provider to a consumer under a contract that:
26	22		(A) has an automatic renewal clause; or
27	23		(B) continues indefinitely until canceled by a
28	24		party.
29		-	Sec. 608.002. APPLICABILITY OF CHAPTER. This chapter does
30		-	not apply to:
31		-	(1) an offering or contract of insurance; or
32		-	(2) evidence of coverage under Chapter 843, Insurance
33		-	Code.
34		-	Sec. 608.003. NOTICE REQUIREMENTS FOR SUBSCRIPTION SERVICE
	25	+	Sec. 608.002. NOTICE REQUIREMENTS FOR SUBSCRIPTION SERVICE
35	26		CONTRACTS. (a) If a service provider and a consumer enter into a
36	27		contract for a subscription service, the service provider shall:
37	28		(1) at the time the service provider enters into the
38	29		contract with the consumer, clearly and conspicuously disclose to
39		-	the consumer the nature of the contract;
40		-	(2) in the disclosure required under Subdivision (1)
41		-	or in a retainable confirmation sent to the consumer not later than
42		-	the fifth day after the date the service provider enters into the
43		-	contract with the consumer, clearly and conspicuously disclose to
44		-	the consumer the procedure for canceling the contract; and
45		-	(3) if the contract has a term of 12 months or more and
46		-	automatically renews for a term of more than one month, give the
	30	+	the consumer the:
	31	+	(A) nature of the contract; and
	32	+	(B) procedure for canceling the contract;
	33	+	(2) if the contract has a term of six months or more
	34	+	and automatically renews for a term of at least one month, give the
47	35		consumer additional written notice of the automatic renewal and the
48	36		procedure for canceling the contract not earlier than the 90th day
49	37		and not later than the 15th day before the date the contract is set
50		-	to renew.
	38	+	to renew; and
	39	+	(3) if the contract does not automatically renew but
	40	+	continues until canceled, give the consumer additional written
	41	+	notice of an upcoming payment not earlier than the 30th day and not
	42	+	later than the fifth day before the date the payment is due.
51	43		(b) A service provider may provide the written notice
52		-	required under Subsection (a)(3):
	44	+	required under Subsection (a)(2) or (3):
53	45		(1) by regular mail or certified mail;
54	46		(2) on an invoice delivered to the consumer; or
55	47		(3) by written electronic communication, including
56	48		electronic mail, if agreed to by the consumer.
57	49		(c) Notice provided under Subsection (b) must be clear and
58	50		conspicuous. For purposes of Subsection (b)(1), the service
59	51		provider may assume that written notice sent by regular mail is
60	52		received by the consumer on the third business day after the date
61	53		the notice is deposited in the mail.
62		-	Sec. 608.004. METHOD OF CANCELLATION. (a) Subject to
63		-	Subsections (b) and (c), a service provider shall provide a
64		-	consumer with multiple methods for canceling a contract for a
65		-	subscription service, which may include cancellation by:
66		-	(1) toll-free telephone number;
67		-	(2) electronic mail;
68		-	(3) mailing address, if the service provider bills the
69		-	consumer using mail; and
70		-	(4) any other cost-effective, timely, and easy-to-use
71		-	method.
72		-	(b) A service provider shall allow a consumer to cancel a
73		-	contract for a subscription service by using the same method as the
74		-	consumer used to enter into the contract, including allowing
75		-	cancellation online, by mail, or by telephone.
76		-	(c) If a subscription service contract is not entered into
77		-	electronically, the service provider shall allow the consumer to
78		-	cancel the contract by mail.
79		-	Sec. 608.005. DECEPTIVE TRADE PRACTICE. Except as provided
80		-	by Section 608.006, a violation of this chapter is a false,
81		-	misleading, or deceptive act or practice under Subchapter E,
82		-	Chapter 17, and is actionable under that subchapter.
83		-	Sec. 608.006. NO PRIVATE CAUSE OF ACTION. A private cause
84		-	of action for a violation of this chapter may not be brought under
85		-	this chapter or under Subchapter E, Chapter 17.
86		-	Sec. 608.007. OPPORTUNITY TO CURE. (a) Before the attorney
87		-	general may bring an action against a service provider under
88		-	Section 608.008 for an initial violation of this chapter, the
89		-	attorney general, on behalf of a consumer, must provide written
90		-	notice to the service provider identifying the specific provisions
91		-	of this chapter that the service provider allegedly violated.
92		-	(b) Not later than the 30th day after the date the notice
93		-	required by Subsection (a) was received by the service provider,
94		-	the service provider shall:
95		-	(1) cure each violation alleged in the notice; and
96		-	(2) provide a written statement to the attorney
97		-	general certifying that:
98		-	(A) each violation alleged in the notice has been
99		-	cured; and
100		-	(B) no further violation of this chapter will
101		-	occur.
102		-	Sec. 608.008. CIVIL PENALTY; REMEDIES. (a) A service
103		-	provider who violates this chapter is liable to this state for a
104		-	civil penalty of not more than $2,000 for each violation for each
105		-	month the violation continues if the service provider:
106		-	(1) fails to cure the violation as provided by Section
107		-	608.007; or
108		-	(2) commits the violation after curing an initial
109		-	violation and providing a written statement to the attorney general
110		-	under Section 608.007.
111		-	(b) The attorney general may bring an action to:
112		-	(1) recover the civil penalty imposed under this
113		-	section;
114		-	(2) obtain a temporary or permanent injunction to
115		-	restrain the violation; or
116		-	(3) seek restitution for consumers who are residents
117		-	of this state and who incurred damages as a direct result of the
118		-	violation.
119		-	(c) An action under this section may be brought in a
120		-	district court in:
121		-	(1) Travis County; or
122		-	(2) a county in which any part of the violation occurs.
123		-	Sec. 608.009. CONSUMER'S OBLIGATIONS UNDER CONTRACT NOT
124		-	AFFECTED. Nothing in this chapter relieves a consumer of the
	54	+	Sec. 608.003. METHOD OF CANCELLATION. (a) A service
	55	+	provider shall allow a consumer to cancel a contract for a
	56	+	subscription service by using the same method as the consumer used
	57	+	to enter into the contract, including allowing cancellation online,
	58	+	by mail, or by telephone.
	59	+	(b) This section does not prohibit the service provider from
	60	+	allowing the consumer to cancel a contract by additional methods.
	61	+	Sec. 608.004. DECEPTIVE TRADE PRACTICE. (a) Except as
	62	+	provided by Subsection (b), a violation of this chapter is a false,
	63	+	misleading, or deceptive act or practice as defined by Section
	64	+	17.46(b), and any remedy under Subchapter E, Chapter 17, is
	65	+	available for a violation of this chapter.
	66	+	(b) A violation of this chapter is not a false, misleading,
	67	+	or deceptive act or practice if the service provider can
	68	+	demonstrate that:
	69	+	(1) as a part of its routine business practice, the
	70	+	service provider has established and implemented written
	71	+	procedures to comply with this chapter and enforces compliance with
	72	+	the procedures;
	73	+	(2) the violation of this chapter is the result of
	74	+	error; and
	75	+	(3) the service provider prospectively canceled the
	76	+	contract for the subscription service within a reasonable time
	77	+	after becoming aware of the error that caused the violation of this
	78	+	chapter, without penalty to the consumer, and has not subsequently
	79	+	automatically renewed or revived that same contract.
	80	+	(c) Subsection (b)(3) does not relieve a consumer of the
125	81		consumer's duties under a contract before the date the contract is
126	82		canceled.
127	83		SECTION 2. Chapter 608, Business & Commerce Code, as added
128	84		by this Act, applies only to a contract entered into or renewed on
129	85		or after the effective date of this Act.
130	86		SECTION 3. This Act takes effect September 1, 2021.