Joining the recent trend of jurisdictions stepping up oversight of automatic renewal laws, North Dakota has enacted a measure regulating auto renewal provisions in the state.
The new chapter of the state’s consumer protection law applies to contracts for the sale of merchandise entered into after July 31, 2019, and requires that the terms of the renewal contract be presented in a “clear and conspicuous” manner, accompanied by information on the “cost-effective, timely and simple” procedure for cancellation.
For renewal periods of longer than six months, sellers must provide an additional written notice to the buyer (by email, first-class mail, or other easily accessible form of communication including text message or via mobile app, if the consumer specifically authorizes notice in such form) that includes the cancellation procedure, at least 30 days—and no more than 60 days—before the contract renews or terminates.
The law prohibits automatic renewal periods of more than 12 months.
North Dakota House Bill 1195 exempts contracts for the sale of insurance and public utilities and does not apply to banks, bank holding companies, credit unions or other financial institutions.
The state’s attorney general was vested with enforcement powers, with each violation of the new chapter a separate violation of the state’s consumer protection law. A private right of action was included in the law, with the possibility of injunctive relief, restitution, costs, expenses and reasonable attorneys’ fees.
To read the new law, click here.
Why it matters: Recent months have seen a wave of legislation with regard to auto renewal laws: Washington, D.C., enacted the Structured Settlements and Automatic Renewal Protections Act of 2018 in January; Vermont’s new law takes effect on July 1, 2019; and California provided additional protections for shoppers last year, some of which go beyond the requirements of the federal Restore Online Shoppers’ Confidence Act.