North Dakota is the latest to join the ever-increasing list of states regulating auto-renew programs. Its new law applies to contracts entered into after July 31, 2019.
Like other states' auto-renew laws, and like the federal ROSCA statute, this one requires marketers to present the terms of the automatic renewal offer in a clear and conspicuous manner and in proximity to the offer itself and to obtain buyers' affirmative consent. And, as in California, marketers must provide an acknowledgment to buyers (capable of being retained by them) that includes the terms of the automatic renewal offer and information about how to cancel. Moreover, the procedure for cancellation must be "cost-effective, timely, and simple."
What's more unusual in North Dakota's law is a requirement for contracts that renew for more than 6 months. For those, the marketer must send a written notice to buyers, in one of the ways specified in the statute, giving them a right to cancel at least thirty days and not more than sixty days before the date upon which the agreement will be renewed or the expiration of the period for cancellation. And, in an even more unusual provision, the North Dakota law establishes an outside limit of 12 months for a renewal period.
The new law is enforceable by state Attorney General and, significantly, provides for private right of action; private litigants can seek injunctive relief, as well as restitution and attorney's fees. Other states, like California, that provide for a private right of action in their auto-renew laws, have seen considerable class action activity. Marketers take note.
"Automatic renewal" means a plan or arrangement in which a paid subscription or purchasing agreement is automatically renewed for a period of more than one month at the end of a definite period for a subsequent period.