HB2970 Summary

• Expands the Automatic Contract Renewal Act to cover contracts with negative option features, where sellers periodically send merchandise announcements and consumers are charged unless they affirmatively decline.

• Requires sellers offering negative option contracts to disclose clearly and conspicuously all material terms including the fact that accounts will be charged unless the consumer takes action to avoid the charge, the payment date, and specific steps to prevent charges.

• Makes it a violation of the Act for sellers to fail to promptly terminate contracts upon written request from contract-complete consumers (those who have purchased the minimum required merchandise) or to ship substituted merchandise without express consumer consent.

• Adds new definitions for "negative option feature," "contract-complete consumer," and "seller" to the Act.

• Applies to contracts entered into on or after the effective date; does not apply to business-to-business contracts, financial institutions, or contracts extended due to consumer-initiated changes to original terms.