| 1 | A bill to be entitled |
| 2 | An act relating to automatic renewal of service contracts; |
| 3 | providing definitions; requiring persons, firms, or |
| 4 | corporations that sell products or services to consumers |
| 5 | pursuant to certain contracts to disclose automatic |
| 6 | renewal provisions; providing disclosure requirements; |
| 7 | providing exceptions to the disclosure requirements; |
| 8 | providing that certain violations will render an automatic |
| 9 | renewal provision void and unenforceable; providing an |
| 10 | effective date. |
| 11 |
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| 12 | Be It Enacted by the Legislature of the State of Florida: |
| 13 |
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| 14 | Section 1. (1) DEFINITIONS.--As used in this act: |
| 15 | (a) "Automatic renewal provision" means a provision under |
| 16 | which a service contract is renewed for a specified period if |
| 17 | the renewal causes the service contract to be in effect more |
| 18 | than 6 months after the day of the initiation of the service |
| 19 | contract. Such renewal is effective unless the consumer gives |
| 20 | notice to the seller of the consumer's intention to terminate |
| 21 | the service contract. |
| 22 | (b) "Consumer" means a person receiving service, |
| 23 | maintenance, or repair under a service contract. The term does |
| 24 | not include a person engaged in business for profit if the |
| 25 | person enters into the service contract as part of the person's |
| 26 | business activities. |
| 27 | (c) "Seller" means a person providing service, |
| 28 | maintenance, or repair under a service contract. |
| 29 | (2) SERVICE CONTRACTS WITH AUTOMATIC RENEWAL PROVISIONS.-- |
| 30 | (a) Any person, firm, partnership, association, or |
| 31 | corporation engaged in commerce that sells, leases, or offers to |
| 32 | sell or lease any product or service to a consumer pursuant to a |
| 33 | service contract that automatically renews unless the consumer |
| 34 | cancels the contract shall disclose the automatic renewal |
| 35 | provision clearly and conspicuously in the contract or contract |
| 36 | offer. |
| 37 | (b) Any person, firm, partnership, association, or |
| 38 | corporation that sells or offers to sell any product or service |
| 39 | to a consumer pursuant to a service contract the term of which |
| 40 | is a specified term of 12 months or more and that automatically |
| 41 | renews for a specified term of more than 1 month unless the |
| 42 | consumer cancels the contract shall notify the consumer in |
| 43 | writing of the automatic renewal provision. Written notice shall |
| 44 | be provided to the consumer no less than 30 days and no more |
| 45 | than 60 days before the cancellation deadline pursuant to the |
| 46 | automatic renewal provision. Such written notice shall disclose |
| 47 | clearly and conspicuously: |
| 48 | 1. That unless the consumer cancels the contract, the |
| 49 | contract will automatically renew. |
| 50 | 2. Methods by which the consumer may obtain details of the |
| 51 | automatic renewal provision and cancellation procedure, whether |
| 52 | by contacting the seller at a specified telephone number or |
| 53 | address, by referring to the contract, or by any other method. |
| 54 | (c) A person, firm, partnership, association, or |
| 55 | corporation that fails to comply with the requirements of this |
| 56 | subsection is in violation of this subsection unless the person, |
| 57 | firm, partnership, association, or corporation demonstrates |
| 58 | that: |
| 59 | 1. As part of its routine business practice, it has |
| 60 | established and implemented written procedures to comply with |
| 61 | this section and enforces compliance with the procedures. |
| 62 | 2. Any failure to comply with this subsection is the |
| 63 | result of error. |
| 64 | 3. As part of its routine business practice, where an |
| 65 | error has caused the failure to comply with this subsection, it |
| 66 | provides a full refund or credit for all amounts billed to or |
| 67 | paid by the consumer from the date of the renewal until the date |
| 68 | of the termination of the contract or the date of the subsequent |
| 69 | notice of renewal, whichever occurs first. |
| 70 | (d) This subsection does not apply to banks, trust |
| 71 | companies, savings and loan associations, savings banks, or |
| 72 | credit unions licensed or organized under the laws of any state |
| 73 | of the United States; any foreign bank maintaining a branch or |
| 74 | agency licensed under the laws of any state of the United |
| 75 | States; or any subsidiary or affiliate thereof. |
| 76 | (e) A violation of this subsection renders the automatic |
| 77 | renewal provision void and unenforceable. |
| 78 | Section 2. This act shall take effect July 1, 2008. |