State auto-renewal law updates continue to keep us busy—and this week is no exception.  On Tuesday, California, whose statute has influenced other state laws and effectively set the standard for national auto-renewal programs, enacted significant amendments to its law.

As we previously blogged about, California proposed amendments to its auto-renewal law earlier this year, many of which mirror the Federal Trade Commission’s proposed updates to its Negative Option Rule governing subscriptions and recurring payments.  Those proposed amendments have been further revised and, now, signed into law, and they apply to contracts entered into, amended or extended on or after July 1, 2025. 

Those of you marketing subscriptions and other negative option programs should pay careful attention to the new requirements, which include the following: 

• Application.  The law explicitly applies to contract provisions that contain a “free-to-pay conversion,” defined as “a provision under which a customer receives a product or service for free for an initial period and will incur an obligation to pay for the product or service if they do not take affirmative action to cancel before the end of that period.”
• Consent.  Businesses must obtain the consumer’s “express affirmative consent” to the automatic renewal or continuous service offer terms (note that language in earlier versions of the bill requiring such consent to be obtained “separately from any other portion of the contract” was removed), and must maintain records of the consumer’s consent for at least three years, or one year after the contract is terminated, whichever period is longer.  The law prohibits businesses from including any information in the contract that undermines the ability of consumers to provide such consent. 
• Cancellation.  The ability to cancel must be available in the same medium that the consumer used to enter into the automatic renewal, or the same medium in which the consumer is accustomed to interacting with the business.  If cancellation is available via a toll-free telephone number, (i) the number shall be clearly and conspicuously displayed on the company’s website, if applicable; (ii) the business shall answer calls promptly during normal business hours; and, (iii) if a consumer leaves a voicemail requesting cancellation, the business must, within one business day, either process the cancellation or call the consumer back.
• Notices.  Businesses must send the consumer an annual reminder (in the same medium described above) that discloses the product or service to which the automatic renewal or continuous service applies, the frequency and amount of the associated charges, and the means to cancel. Additionally, in the case of a fee change, including one the consumer affirmatively consented to in an existing plan or arrangement, businesses must provide clear and conspicuous notice of the fee change and information regarding how to cancel (in a manner that is capable of being retained by the consumer) 7-30 days before such fee change takes effect.  With respect to notice of specified automatic renewal or continuous service terms, the law now requires such terms to be provided “before confirming the consumer’s billing information.”
• Save Attempts.  The law now regulates “save” attempts by phone and online.  By phone, businesses may present the consumer with a discounted offer, retention benefit or information regarding the effect of cancellation, provided that the business first informs the consumer that they may complete the cancellation process at any time by stating that they want to “cancel” or words to that effect. Similarly, online, such offers/information may be displayed, provided that the business simultaneously displays “a prominently located and continuously and proximately displayed direct link or button” entitled “click to cancel” or language to that effect.

As many of these new requirements impose burdens for implementation, requiring many businesses to modify their contracts, materials, online systems and sales processes, it’s definitely not too early to start thinking about and pursuing compliance efforts.