Adam Martin

Addressing Expanding Regulations for Auto-Renewal Consent

Automatic renewal arrangements are popular and beneficial for both companies and consumers. Customers are saved the trouble of having to continually take actions to keep their subscription active, while companies improve their retention rates and forecasting abilities.

However, in the last few years, the legal environment has become more restrictive on automatic renewal arrangements. There’s been a push at national and state levels (Vermont being the most recent state) to better inform and protect customers from accidentally entering into long-term subscription service agreements, as well as enabling them to cancel out. It’s important for companies to be aware of, and plan for, complying with these regulations.

Fortunately, we have experience handling auto-renewal features, having implemented changes for digital wallet-type payments (PayPal) and more recently Visa’s new cardholder consent requirements.

New Advantage controls are coming for both obtaining auto-renewal consent and clearly stating the auto-renewal description, which most regulations require. Since auto-renewal regulations can differ by geographic location and the length of subscription terms, we are including the ability to link these controls to specific geographic locations. This enables you to create controls to match the specific regulations in each area where this is needed. For example, Vermont requires customers to consent to automatic renewal and to the clear and concise description of it, but only if the subscription term is a year or more. (I wonder if we will start to see 11-month offers!)

Although auto-renewal regulations can differ depending on location, most include a mandate that auto-renewal text be “clear and concise” for the customers’ benefit. To that end, you can use a rich-text editor to better format and highlight auto-renewal text. This provides more control over text elements such as fonts, sizes and colors to make the auto-renewal text more conspicuous and fulfill this mandate. Vermont requires the description of the auto-renewal policy be in bold text.

Based on our research, we’re confident these new features will provide you with the ability to comply with automatic renewal regulations. But, as always, we value your input on the solutions we’ve designed. Please feel free to review the full Auto-Renewal Consent Specification for more details. Contact your ACS representative with any questions or suggestions.

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