| 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 services to consumers pursuant to |
| 5 | certain contracts to disclose automatic renewal |
| 6 | provisions; providing disclosure requirements; providing |
| 7 | exceptions to the disclosure requirements; providing that |
| 8 | certain violations will render an automatic renewal |
| 9 | provision void and unenforceable; providing applicability; |
| 10 | 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 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 an individual receiving service, |
| 23 | maintenance, or repair under a service contract. The term does |
| 24 | not include an individual engaged in business if the individual |
| 25 | enters into the service contract as part of or ancillary to the |
| 26 | individual's business activities. |
| 27 | (c) "Seller" means an individual providing service, |
| 28 | maintenance, or repair under a service contract to a consumer. |
| 29 | (d) "Service contract" means a written contract for the |
| 30 | performance of services over a fixed period of time or for a |
| 31 | specified duration. |
| 32 | (2) SERVICE CONTRACTS WITH AUTOMATIC RENEWAL PROVISIONS.-- |
| 33 | (a) Any person, firm, partnership, association, or |
| 34 | corporation engaged in commerce that sells, leases, or offers to |
| 35 | sell or lease any service to a consumer pursuant to a service |
| 36 | contract that automatically renews unless the consumer cancels |
| 37 | the contract shall disclose the automatic renewal provision |
| 38 | clearly and conspicuously in the contract or contract offer. |
| 39 | (b) Any person, firm, partnership, association, or |
| 40 | corporation that sells or offers to sell any service to a |
| 41 | consumer pursuant to a service contract the term of which is a |
| 42 | specified term of 12 months or more and that automatically |
| 43 | renews for a specified term of more than 1 month unless the |
| 44 | consumer cancels the contract shall provide the consumer with |
| 45 | written or electronic notification of the automatic renewal |
| 46 | provision. Notification shall be provided to the consumer no |
| 47 | less than 30 days and no more than 60 days before the |
| 48 | cancellation deadline pursuant to the automatic renewal |
| 49 | provision. Such notification shall disclose clearly and |
| 50 | conspicuously: |
| 51 | 1. That unless the consumer cancels the contract the |
| 52 | contract will automatically renew. |
| 53 | 2. Methods by which the consumer may obtain details of the |
| 54 | automatic renewal provision and cancellation procedure, whether |
| 55 | by contacting the seller at a specified telephone number or |
| 56 | address, by referring to the contract, or by any other method. |
| 57 | (c) A person, firm, partnership, association, or |
| 58 | corporation that fails to comply with the requirements of this |
| 59 | subsection is in violation of this subsection unless the person, |
| 60 | firm, partnership, association, or corporation demonstrates |
| 61 | that: |
| 62 | 1. As part of its routine business practice, it has |
| 63 | established and implemented written procedures to comply with |
| 64 | this section and enforces compliance with the procedures. |
| 65 | 2. Any failure to comply with this subsection is the |
| 66 | result of error. |
| 67 | 3. As part of its routine business practice, where an |
| 68 | error has caused the failure to comply with this subsection, the |
| 69 | unearned portion of the contract subject to the automatic |
| 70 | renewal provision is refunded as of the date on which the seller |
| 71 | is notified of the error. |
| 72 | (d) This subsection does not apply to: |
| 73 | 1. A financial institution as defined in s. 655.005(1)(h), |
| 74 | Florida Statutes, or any depository institution as defined in 12 |
| 75 | U.S.C. s. 1813(c)(2); |
| 76 | 2. A foreign bank maintaining a branch or agency licensed |
| 77 | under the laws of any state of the United States; |
| 78 | 3. Any subsidiary or affiliate of an entity described in |
| 79 | subparagraph 1. or subparagraph 2.; |
| 80 | 4. A health studio as defined in s. 501.0125(1), Florida |
| 81 | Statutes; or |
| 82 | 5. Any entity licensed under chapter 634. |
| 83 | (e) A violation of this subsection renders the automatic |
| 84 | renewal provision void and unenforceable. |
| 85 | Section 2. This act shall take effect July 1, 2008, and |
| 86 | shall apply only to contracts entered into on or after July 1, |
| 87 | 2008. |