Netflix, dating apps and other automatically renewed subscription services being targeted by Colorado bill
The scenario isn’t unique: You subscribed to an online service or subscription — a dating app or Netflix — for a trial period or a cheap limited-time deal, forgot about the auto renewal and then noticed a large charge on your credit card. If you’re lucky, some companies will refund you but others require you to finish out the contract.
Under HB21-1239, a bill the Colorado legislature passed this week and getting sent to Gov. Jared Polis, online and in-person dating services would be required to provide a three-day cancelation window for members. Additionally, companies with automatic-renewal contracts (say, lawn care services or a subscription to your favorite magazine) would have to tell you before a renewal or price increase takes effect. As long as you live in Colorado when you enter into the contract, these regulations would apply.
How else would this affect you? The Denver Post has answers.
What will companies with automatic renewals have to do?
Service providers would have to get the buyer’s consent before charging a customer; provide a written agreement of the contract terms and cancellation process (which has to be simple); and notify the consumer between 25 and 40 days before any auto-renewal. This also includes services with a trial period. Providers would have to inform consumers of any changes to the contract, including to costs.
Jefferey Riester with the Colorado Attorney General’s office said the bill is a chance to protect consumers at the front and back end of purchases.
Buyers who feel their rights are violated could file a complaint with the state attorney general’s office. Between 2018 and at least March, the attorney general’s office received more than 1,000 complaints related to auto-renewals.
Are there any providers that are exempt?
Yes. Some businesses already have to comply with state and federal regulations, including insurance companies, public utilities, airlines and banks.
Back to dating services … how long do you have to cancel?
A Colorado resident would be able to cancel an online or in-person dating service contract until midnight on the third business day after accepting the initial contract. The contract has to be in writing, be accessible online and include a notice about the right to cancel and the way to do it.
Isn’t the three-day window already in federal law?
No. The Federal Trade Commission’s “Cooling-Off Rule” typically applies to in-person sales and is specific to certain types of purchases.
What other protections are there for dating apps?
The service provider can’t require payment for more than two years. If the person can no longer use the service (because of a disability or death), the buyer or their estate can ask for the contract be terminated. If the person moves more than 50 miles from the dating service’s office (or regular meeting location) and comparable service isn’t available where the buyer has moved, the buyer can be refunded for that portion of the contract.
The online dating services also would be required to provide information about dating safety, a way to report issues about other members and notification to those who’ve interacted with banned members. (A recent ProPublica investigation revealed dating app representatives were expected to resolve sexual assault claims in minutes without special training.)
How does this bill differ from other states’ laws?
One of the key differences, according to Riester, is other states’ protections only apply to contracts that are a year or longer, where Colorado’s would apply to contracts that are less than a year. Also, Colorado’s requirement of when consumers should be notified would be stricter than other states, he said.
But regulations for the dating apps are similar to what places like California have enacted, according to bill sponsor Democratic Rep. Cathy Kipp of Fort Collins.
When will this take effect?
The bill is expected to take effect Jan. 1, 2022, unless voters decided to put the question on the November ballot. The attorney general’s office wanted to dedicate some time to education first and allow for existing contracts to continue, Riester said.
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