|State auto-renewal laws require businesses to notify subscribers about upcoming renewals of annual subscriptions, but not month-to-month arrangements. In Colorado, that’s about to change. Colorado recently enacted a new law governing automatically renewing consumer contracts, which will take effect on January 1, 2022.
For the most part, the new law mimics the requirements and prohibitions found in ROSCA and the auto-renewal laws of other states: clear disclosure of the terms, sending a confirmation, easy-to-use cancellation method, etc.However, Colorado’s new law differs from similar state and federal statutes in one critical aspect: it requires any business offering auto-renewing consumer agreements with a term of less than one year to send out a notice to subscribers 25-40 days before the renewal that will take that subscription over the one-year mark.
The business must send a similar notice 25-40 days before the start of each renewal period that will include the anniversary of the subscriber’s initial enrollment date. For example, if a subscriber first enrolls in a month-to-month subscription on 1/1/22, he or she might get a renewal reminder on 12/7/22, 12/7/23, 12/7/24 and so on. (For annual or longer subscription terms, these reminders must be sent 25-40 days before each renewal.)
The notice must inform the consumer that his or her subscription will automatically renew unless cancelled, describe the business’ easy-to-use cancellation process, and clearly identify the sender.
Companies that already offer annual or other long-term subscriptions at the national level will probably not view this additional compliance requirement for Colorado residents as a significant burden, but the same cannot be said for the thousands of businesses that only offer month-to-month subscriptions. Those companies have never had to deal with renewal notices before, but will need to send them to Colorado-based subscribers starting in January.
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