2023-2024 Regular Session HB 2196 PN 3280 Bill Text (HTM)

PRIOR PRINTER'S NOS. 2871, 3139

PRINTER'S NO. 3280

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

2196

Session of

2024

INTRODUCED BY CONKLIN, RABB, HILL-EVANS, KINSEY, GIRAL,

McANDREW, PARKER, GUENST, MERSKI, SANCHEZ, McNEILL, HOWARD,

KHAN, HARKINS, DALEY, HADDOCK, DELLOSO, WARREN, BRENNAN,

MAYES AND GUZMAN, APRIL 8, 2024

AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES,

JUNE 10, 2024

AN ACT

Providing for automatic renewal provisions in certain contracts

for goods and services.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Short title.

This act shall be known and may be cited as the Contract

Automatic Renewal Act.

Section 2. Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Acquirer." A person who purchases or acquires a contract or

business from a seller and becomes a party to a contract.

"Automatic renewal provision." A provision of a contract

under which the contract is renewed for a specific period of

more than one month, if the renewal causes the contract to be in

effect for more than six months after the original effective

date of the contract.

"Consumer." A person who purchases or leases services under

a contract.

"Contract." A written agreement for the sale or lease of a

service, between a consumer and a vendor over a fixed period of

time or for a specified duration. The term does not include an

agreement that allows a consumer to cancel the agreement at any

time and to receive upon cancellation a pro rata refund of any

unearned amounts paid by the consumer.

"Seller." A person who sells or transfers a contract to an

acquirer.

"Vendor." A person engaged in trade or commerce in this

Commonwealth who advertises, sells, leases or offers to sell or

lease a service to a consumer under a contract.

Section 3. Contracts with automatic renewal provisions.

(a) Disclosure required.--

(1) A vendor that enters or attempts to enter into a

contract in this Commonwealth which includes an automatic

renewal provision shall disclose the automatic renewal

provision in the contract or contract offer in boldface of a

size no less than that of the surrounding text, but under no

circumstances in a font size less than 10 points.

(2) A contract that is amended or modified after the

effective date of this paragraph shall be amended or modified

to include the disclosure specified in paragraph (1).

(b) Notification upon sale or acquisition of business or

contract.--After the sale or acquisition of a business that is a

party to a contract with an automatic renewal clause, or after

the sale or acquisition of a contract with an automatic renewal

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clause, the acquirer shall, within 60 days, notify the consumer

of the sale. The notification shall clearly indicate the change

in ownership of the business or contract and provide the

consumer with an opportunity to opt out of the automatic renewal

provision.

(1) A vendor or acquirer that is party to a contract in

this Commonwealth which automatically renews for a specified

period of more than one month shall provide the consumer with

written or electronic notification of the automatic renewal

provision. If the vendor has changed and is no longer the

original vendor, the notification shall include a statement

indicating the change.

(2) The notification under this subsection shall be

provided to the consumer no less than 30 days nor more than

60 days before the cancellation deadline under the automatic

renewal provision. An acquirer shall have complied with the

requirement under this paragraph if a notification under

subsection (b) was provided at least 120 days before the

cancellation deadline under the automatic renewal provision.

(3) For a contract that is scheduled to automatically

renew following the effective date of this paragraph, the

vendor shall provide the consumer with notification of the

automatic renewal in accordance with the requirements of this

section.

(d) Contents of notice.--The notification required under

subsection (c) shall disclose clearly and conspicuously:

(1) That unless the consumer cancels the contract before

the cancellation deadline, the contract will automatically

renew.

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(2) The cancellation deadline.

(3) The method by which the consumer may obtain details

of the automatic renewal provision and cancellation

procedure, whether by contacting the vendor at a specified

telephone number or address, by referring to the contract or

by any other method.

(e) Proof of notification.--A vendor must retain proof of

the notification provided to a consumer subject to a contract

with an automatic renewal provision. The proof of notification

shall be retained by the vendor for six years following the

expiration of the term during which the notification was sent.

The proof of notification may be retained in an electronic

format.

(f) Automatic renewal effective.--An automatic renewal

provision in a contract shall be valid unless the consumer gives

notice to the vendor to cancel the contract or unless the vendor

fails to comply with the requirements of this section.

(g) Right of rescission.--A contract that contains an

automatic renewal provision in which the services have a sale

price of at least $25 and which are sold or contracted to be

sold to a consumer as a result of, or in connection with, a

contact with or call on the consumer at the consumer's residence

either in person or by telephone shall comply with the notice

provisions specified in section 7 of the act of December 17,

1968 (P.L.1224, No.387), known as the Unfair Trade Practices and

Consumer Protection Law.

Section 4. Violations.

A vendor that fails to comply with the requirements of

section 3 is in violation of this act.

Section 5. Void provisions.

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An automatic renewal provision of a contract in violation of

this act is void and unenforceable in this Commonwealth.

Section 6. Enforcement.

A violation of this act shall constitute an unfair or

deceptive trade or practice for purposes of the act of December

17, 1968 (P.L.1224, No.387), known as the Unfair Trade Practices

and Consumer Protection Law, and shall be subject to the penalty

and enforcement provisions AVAILABLE TO THE ATTORNEY GENERAL OR

A DISTRICT ATTORNEY of that act.

Section 7. Applicability.

(a) General rule.--Except as provided in subsection (b),

this act shall apply to contracts executed or renewed after the

effective date of this subsection.

(b) Exceptions.--This act shall not apply to:

(1) A lease subject to the act of April 6, 1951 (P.L.69,

No.20), known as The Landlord and Tenant Act of 1951.

(2) A contract subject to the act of December 21, 1989

(P.L.672, No.87), known as the Health Club Act.

(3) A person or entity providing service contracts as

defined in section 358 of the act of May 17, 1921 (P.L.682,

No.284), known as The Insurance Company Law of 1921, or an

affiliate of the person or entity.

(4) A person or entity regulated by the Insurance

Department or an affiliate of the person or entity.

(5) A contract subject to the act of December 3, 1996

(P.L.802, No.138), known as the Electricity Generation

Customer Choice and Competition Act.

(6) A contract subject to the act of June 22, 1999

(P.L.122, No.21), known as the Natural Gas Choice and

Competition Act.

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(7) A contract between a consumer and a bank, savings

association, credit union, trust company, a licensee subject

to 7 Pa.C.S. Ch. 61 (relating to Mortgage Loan Industry

Licensing and Consumer Protection), or an affiliate of any of

these businesses, including the sale, assignment or transfer

of a contract to any other business or affiliate.

Section 8. Effective date.

This act shall take effect in 60 days.

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