Automatic renewal should be easy to cancel, but many aren’t, and it’s against the law (2024)

Chris O’Brien of Pasadena is an actor. He gets some jobs through casting websites like Casting Frontier.

But recently, it wasn’t a job from Casting Frontier that caught O’Brien’s eye, but a credit card charge.

“They seemed to have just raised the price suddenly,” he said.

O’Brien’s annual membership with Casting Frontier is set up for automatic renewal. And when the most recent automatic charge hit, he said the cost had gone way up. He contends Casting Frontier never told him about the increase.

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“It went from $75 to $200, it was more than double," he said. "And especially the way inflation has been the last year, that’s my grocery money for the month. It was out of nowhere. I never got an email or a warning."

Robert Tauler and Kevin Cole are O'Brien's attorneys and they're suing Casting Frontier.

“Anytime a consumer feels wrong about a situation or feels frustrated with a subscription service, that’s reason enough to know that something's probably off,” Tauler said.

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According to state law, when you sign up for a subscription that automatically reviews, the company must explain when it’ll charge you and how much. It’s also required to make it simple for you to cancel the subscription.

“So there are very specific protections that California puts in place to make sure that if consumers are going to get a second charge, an automatic renewal, that they’re told about it, they understand it, they know it's coming, they can cancel with ease,” said Cole.

If O’Brien wins his case, he’ll be awarded a minimum of $2,500, per law.

The I-Team reached out to Casting Frontier, but it didn’t respond. But in a legal response to the lawsuit, the company denied it did anything wrong.

Douglas Allen is an assistant district attorney in Santa Cruz county. He’s also a member of a state task force, set up to enforce the automatic renewal law.

“Frankly, we see some pretty egregious violations of the law,” he said.

Allen said most companies comply with the law, but some make it especially difficult for customers to cancel their subscriptions.

“There’s a lot of money to be made in the auto renewing contracts. And the less savory companies expect to make their money because they deceive people into three or four auto renewals before they realize what they’ve signed up for,” he said.

In the past eight years, Allen said the task force has investigated 45 companies; 15 were found in violation of the law, resulting in $16 million in fines.

As for O’Brien, it wasn’t an easy decision to come forward, but he hopes it will help others save money.

“It can be scary to sort of say, ‘I don’t think I'm being treated right,’ because you don’t know, if you upset the wrong person, then you’re not an actor anymore.” he said.

Automatic renewal should be easy to cancel, but many aren’t, and it’s against the law (2024)

FAQs

What is the problem with automatic renewal? ›

The Pitfall of Automatic Renewals

Automatic renewal clauses can inadvertently commit you to another contract period without explicit consent. The issue arises when the opt-out deadline is so prematurely set that missing it becomes almost inevitable, leading to an unwelcome surprise of continued service and charges.

Are automatically renewing contracts legal? ›

Autorenewal contracts are legal and can be enforced in court. They are subject to certain requirements and state law may vary on what an autorenewal contract must contain to be enforceable. The enforceability of these provisions differs based on the contractual relationship of the parties.

Can I cancel an auto renewal contract? ›

A firm must provide a consumer with easy and accessible methods for cancelling the automatic renewal feature in the consumer's contract. The methods provided by a firm in accordance with ICOBS 6A. 6.3R must include at least all the methods by which a consumer is able to purchase a new policy with the firm.

What is the legal clause of automatic renewal? ›

An automatic renewal clause (sometimes referred to as an evergreen or self-renewal clause) is a contractual provision that operates at the end of a contract's current term to automatically extend the term for a specified period of time, unless one of the parties provides notice of its intent not to renew.

How do I fight automatic renewal? ›

You can do so by:
  1. Lodging a dispute with your card issuer or bank.
  2. Recording a complaint with the Better Business Bureau (BBB)
  3. Reporting fraud to the Federal Trade Commission (FTC)
  4. Filing an individual personal injury lawsuit for financial damages.
  5. Joining a class-action consumer fraud lawsuit.

How do I get my money back from automatic renewal? ›

If you're charged without your consent, and the company won't refund your money, dispute the charge (also called a “chargeback”) with your credit or debit card company right away.

How do I get out of an auto-renewal contract? ›

You can get out of an auto-renewal contract by serving a written notice to the other contracting party to inform them of your decision not to renew your existing contract. This must be before by the automatic renewal date and within the notice period outlined within the renewal clause.

Can I dispute automatic renewal? ›

Typically, the service provider will provide a legally binding auto-renewal contract for the customer to sign/e-sign/certify in writing or legally binding digital formats. Can customers dispute auto-renewal charges? In short, yes.

What are the disadvantages of auto-renewal? ›

Despite their benefits, relying on auto-renewal contracts can have significant disadvantages,, ultimately impacting a business's bottom line.
  • Often Mismanaged. ...
  • Unexpected Financial Commitments. ...
  • Inflexible Terms and Lack of Negotiation Leverage. ...
  • Misalignment with Business Goals. ...
  • Regulatory and Compliance Risks.

How do I stop auto-renewal services? ›

The easiest way to cancel your automatic renewal subscription is at the source of the charge, such as with Google Play, Amazon or the vendor itself. However, if your best efforts to contact the source of the charge fail, you can report future charges from the vendor as fraudulent to your card issuer.

How do I stop auto-renewal payments? ›

The best way to stop these payments is to first cancel your subscription with the company directly by requesting a cancellation via email or phone. If this doesn't work, you should contact your bank or card company online or by phone to cancel the payment.

What is the defense against the enforcement of the automatic renewal clause? ›

A common and successful defense against landlords attempting to enforce an automatic renewal clause in a lease is to point out that there was no limit to how many times a lease could automatically renew, and that the lease was never notarized.

What is the federal law for automatic renewal? ›

The Federal Trade Commission rule on negative options is the main federal law that governs automatic renewal offers by companies. In addition to the FTC rule, there are a couple of other federal statutes that also apply to automatic renewals: The Restore Online Shoppers' Confidence Act (ROSCA)

What are the rules for auto renewal? ›

Typically, an auto-renewal/evergreen clause might take the following form: "Each Term shall automatically renew for subsequent period of the same length as the initial Term unless either party gives the other written notice of termination at least (30) days prior to expiration of the current term."

What is the FTC rule for automatic renewal? ›

The rule prohibits misrepresentations in connection with a transaction involving an automatic-renewal feature—not simply a misrepresentation related to the automatic renewal program, but any misrepresentation at all related to the transaction or the underlying good or service, regardless of whether it is connected to ...

What are the disadvantages of auto renewal? ›

Despite their benefits, relying on auto-renewal contracts can have significant disadvantages,, ultimately impacting a business's bottom line.
  • Often Mismanaged. ...
  • Unexpected Financial Commitments. ...
  • Inflexible Terms and Lack of Negotiation Leverage. ...
  • Misalignment with Business Goals. ...
  • Regulatory and Compliance Risks.

Is auto renewal predatory? ›

Why are auto-renewals considered predatory? Auto-renewals are often seen as predatory because they exploit consumers' convenience and complacency. Companies design these systems to automatically charge customers for subscriptions or services without their explicit consent.

How to get out of an auto renewal contract? ›

You can get out of an auto-renewal contract by serving a written notice to the other contracting party to inform them of your decision not to renew your existing contract. This must be before by the automatic renewal date and within the notice period outlined within the renewal clause.

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