California’s law regulating online subscriptions was updated effective July 1, 2018 requiring that accounts opened online must be permitted to be cancelled online.
A consumer who accepts an automatic renewal or continuous service offer online shall be allowed to terminate the automatic renewal or continuous service exclusively online. Cal. Bus. & Prof. Code § 17602 (c).
New provisions also cover free or discounted trial periods. A cancellation notification must be given prior to the end of this period giving the consumer information on how to cancel prior to being charged the new or non-discounted price. Cal. Bus. & Prof. Code § 17602 (a)(3).
Here is a short list of companies who found themselves defending a class action suit based in this California law: Vemma Nutrition; Spotify; Dropbox; Tinder; LifeLock; Birchbox; Google and Apple.
You business should take the following steps to protect against non-compliance:
1. Your auto renewal terms should be stated clearly and conspicuously (including the offering, price, frequency of charges and length of minimum terms).
2. Put a process in place to obtain your client's affirmative consent before they pay and explain to your clients how to cancel online, if the subscription is created online.
3. It is a good idea to send your client a confirmation email with all the relevant offer terms and the cancellation policy before the first payment or before a price increase