HOUSE JUDICIARY COMMITTEE SUBSTITUTE FOR

HOUSE CONSUMER AND PUBLIC AFFAIRS COMMITTEE SUBSTITUTE FOR

HOUSE BILL 522

54th legislature - STATE OF NEW MEXICO - first session, 2019

AN ACT

RELATING TO CONSUMER PROTECTION; DECLARING AS AN UNLAWFUL PRACTICE THE AUTOMATIC RENEWAL OF CONSUMER CONTRACTS OR CONTINUATION OF DELIVERY OF PRODUCTS OR SERVICES WITHOUT PRIOR CONSUMER CONSENT; REQUIRING CERTAIN DISCLOSURES IN OFFERS TO RENEW CONTRACTS FOR AND CONTINUE DELIVERY OF PRODUCTS OR SERVICES TO CONSUMERS; REQUIRING THAT CONSUMERS BE PROVIDED WITH AN OPTION TO TERMINATE THOSE CONTRACTS OR TO CONTINUE DELIVERIES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. A new section of the Unfair Practices Act is enacted to read:

     "[NEW MATERIAL] RENEWAL AND CONTINUOUS DELIVERY CONTRACTS--REQUIREMENTS--REMEDIES FOR VIOLATIONS.--

          A. It is an unlawful practice within the meaning of the Unfair Practices Act for a person to renew a contract, other than a service contract as defined in the Service Contract Regulation Act, for or continue delivery of a product or service to a consumer after the expiration of the term of the contract, including after a free trial, discount or other introductory offer, without:

                (1) obtaining the consumer's prior explicit consent, which may be obtained at the time the consumer enters into the contract; provided that, if the person fails to obtain the consumer's prior explicit consent at the time the consumer enters into the contract containing the automatic renewal terms, an offer to:

                     (a) renew an annual contract for or continue delivery of a product or service shall be provided to the consumer not more than sixty days, and not less than thirty days, prior to the expiration date of the term of the contract for delivery of the product or service; and

                     (b) continue delivery of a product or service upon the expiration of a free trial, discount or other introductory offer period shall be provided to the consumer not more than ten days, and not less than five days, prior to the date of expiration; and 

                (2) at the time the consumer enters into the contract:

                     (a) presenting to the consumer via internet link, or on the contract confirmation page, in larger type than the surrounding text, or in contrasting type, font or color to the surrounding text of the same size, or set off from the surrounding text of the same size by symbols or other marks, in a manner that clearly calls attention to the language: 1) clear instructions to the consumer on how to cancel the contract for or continued delivery of the product or service, including a toll-free telephone number, electronic mail address and postal address, if the person directly bills the consumer, for cancellation, or if a person makes and the consumer accepts the offer online, instructions on how the consumer may terminate the contract for or continued delivery of the product or service online; 2) the recurring charges that will be charged to the consumer's credit or debit account or payment account with a third party as a result of accepting the offer; 3) the length of the term of delivery of the product or service; and 4) the minimum purchase obligation, if any; and

                     (b) in the case of an audio disclosure, providing to the consumer the terms listed in Subparagraph (a) of this paragraph in a volume and cadence sufficient to be readily audible and understandable to the consumer prior to the consumer's consent.

          B. If a person violates a provision of this section, in addition to any other remedy provided pursuant to the Unfair Practices Act, the product or service that is the subject of a contract or continued delivery shall be deemed an unconditional gift to the consumer. The consumer may use or dispose of the product or service in any manner without any obligation to that person.

          C. The provisions of this section do not apply to a federally insured depository institution or an insurer as defined in Section 59A-1-8 NMSA 1978."

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