Joining California and a few other states, New York has amended its automatic renewal law again to require annual renewal notices. The amendments, signed into law earlier this month and effective immediately, require businesses that market a “continuous service offer for an initial paid term of one year or longer” that will renew for a paid term of six months or longer to provide a notice between 15 and 45 days prior to the cancellation deadline for the automatic renewal, along with instructions how to cancel prior to the renewal charge. 

Although this new requirement should not add much additional burden to subscription marketers already complying with California’s law, it does add to the “patchwork of laws and regulations” that the FTC’s pending rulemaking is supposed to address.  However, the FTC proposed rule, in its current form, only requires sellers of non-physical goods to provide annual notices.  (That bag of dog food that arrives on your door step every month? No annual reminder needed under the FTC proposed rule: the bag itself apparently does the trick.) And since the rule, as currently drafted, would not preempt state law requirements, except where inconsistent with the FTC’s requirements, New York’s –and other states’ – stricter notice provisions would still apply. However, since many states' automatic renewal laws do not contain notice requirements, the FTC rule would, at least, set a base nationwide. (But remember that a few states require more frequent reminder notices.)  

As noted in our year end blog post, the subscription landscape is continuing to evolve and even stricter requirements may be coming soon once the FTC finalizes the Rule Concerning Recurring Subscriptions and Other Negative Option Plans.  Subscription marketers should continue to monitor the ever-changing regulatory landscape and, even more importantly, do a careful audit of their negative option offerings to ensure that, at a minimum, they’re complying with the universal requirements of providing clear and unavoidable disclosures; obtaining consumers’ unambiguous consent to recurring charges; and ensuring that there an easy method of cancellation.

The statute exempts entities regulated by the public service commission or the FCC, banks and some other entities.