| 1 | A bill to be entitled |
| 2 | An act relating to automatic renewal of service contracts; |
| 3 | providing definitions; requiring sellers that sell, lease, |
| 4 | or offer to sell or lease any 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 |
| 10 | applicability; providing an 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 section: |
| 15 | (a) "Automatic renewal provision" means a provision under |
| 16 | which a service contract is renewed for a specified period of |
| 17 | more than 1 month if the renewal causes the service contract to |
| 18 | be in effect more than 6 months after the day of the initiation |
| 19 | of the service contract. Such renewal is effective unless the |
| 20 | consumer gives notice to the seller of the consumer's intention |
| 21 | to terminate the service contract. |
| 22 | (b) "Consumer" means an individual, as defined in s. |
| 23 | 501.603, receiving service, maintenance, or repair under a |
| 24 | service contract. The term does not include an individual |
| 25 | engaged in business or employed by or otherwise acting on behalf |
| 26 | of a governmental entity if the individual enters into the |
| 27 | service contract as part of or ancillary to the individual's |
| 28 | business activities or on behalf of the business or governmental |
| 29 | entity. |
| 30 | (c) "Seller" means any person, firm, partnership, |
| 31 | association, or corporation engaged in commerce that sells, |
| 32 | leases, or offers to sell or lease any service to a consumer |
| 33 | pursuant to a service contract. |
| 34 | (d) "Service contract" means a written contract for the |
| 35 | performance of services over a fixed period of time or for a |
| 36 | specified duration. |
| 37 | (2) SERVICE CONTRACTS WITH AUTOMATIC RENEWAL PROVISIONS.-- |
| 38 | (a) Any seller that sells, leases, or offers to sell or |
| 39 | lease any service to a consumer pursuant to a service contract |
| 40 | that automatically renews for a specified period of more than 1 |
| 41 | month, unless the consumer cancels the contract, shall disclose |
| 42 | the automatic renewal provision clearly and conspicuously in the |
| 43 | contract or contract offer. |
| 44 | (b) Any seller that sells or offers to sell any service to |
| 45 | a consumer pursuant to a service contract the term of which is a |
| 46 | specified period of 12 months or more and that automatically |
| 47 | renews for a specified period of more than 1 month, unless the |
| 48 | consumer cancels the contract, shall provide the consumer with |
| 49 | written or electronic notification of the automatic renewal |
| 50 | provision. Notification shall be provided to the consumer no |
| 51 | less than 30 days or no more than 60 days before the |
| 52 | cancellation deadline pursuant to the automatic renewal |
| 53 | provision. Such notification shall disclose clearly and |
| 54 | conspicuously: |
| 55 | 1. That unless the consumer cancels the contract the |
| 56 | contract will automatically renew. |
| 57 | 2. Methods by which the consumer may obtain details of the |
| 58 | automatic renewal provision and cancellation procedure, whether |
| 59 | by contacting the seller at a specified telephone number or |
| 60 | address, by referring to the contract, or by any other method. |
| 61 | (c) A seller that fails to comply with the requirements of |
| 62 | this subsection is in violation of this subsection unless the |
| 63 | seller demonstrates that: |
| 64 | 1. As part of the seller's routine business practice, the |
| 65 | seller has established and implemented written procedures to |
| 66 | comply with this section and enforces compliance with the |
| 67 | procedures. |
| 68 | 2. Any failure to comply with this subsection is the |
| 69 | result of error. |
| 70 | 3. As part of the seller's routine business practice, |
| 71 | where an error has caused the failure to comply with this |
| 72 | subsection, the unearned portion of the contract subject to the |
| 73 | automatic renewal provision is refunded as of the date on which |
| 74 | the seller is notified of the error. |
| 75 | (d) This subsection does not apply to: |
| 76 | 1. A financial institution as defined in s. 655.005(1)(h), |
| 77 | Florida Statutes, or any depository institution as defined in 12 |
| 78 | U.S.C. s. 1813(c)(2). |
| 79 | 2. A foreign bank maintaining a branch or agency licensed |
| 80 | under the laws of any state of the United States. |
| 81 | 3. Any subsidiary or affiliate of an entity described in |
| 82 | subparagraph 1. or subparagraph 2. |
| 83 | 4. A health studio as defined in s. 501.0125(1), Florida |
| 84 | Statutes. |
| 85 | 5. Any entity licensed under chapter 627, chapter 634, |
| 86 | chapter 636, or chapter 641, Florida Statutes. |
| 87 | 6. Any electric utility as defined in s. 366.02(2), |
| 88 | Florida Statutes. |
| 89 | 7. Any private company as defined in s. 180.05, Florida |
| 90 | Statutes, providing services described in chapter 180, Florida |
| 91 | Statutes, that is competing against a governmental entity or has |
| 92 | a governmental entity providing billing services on its behalf. |
| 93 | (e) A violation of this subsection renders the automatic |
| 94 | renewal provision void and unenforceable. |
| 95 | Section 2. This act shall take effect July 1, 2009, and |
| 96 | shall apply only to contracts entered into on or after that |
| 97 | date. |