Scherer-Backed Bill Cracks Down on Costly Automatic Renewal Contracts
SPRINGFIELD, Ill. – Contracts and subscription services that automatically renew would have to inform customers of future costs under new legislation advanced by state Rep. Sue Scherer, D-Decatur.
“Between news services, social media apps, and the games kids enjoy, families and seniors are signing more contracts than ever, and many hide automatic renewal clauses which amount to hidden fees that subscribers don’t notice until costs kick in,” said Scherer. “Service providers need to be up front with the costs so consumers can make a fully informed decision.”
Scherer is sponsoring Senate Bill 328, which requires companies to be more transparent in their offers of any contract that consumers enter such as phone, subscription service, and credit card contracts. Contracts that automatically renew would have to clearly and conspicuously disclose the renewal terms, including the amount of any reoccurring charges, the length of the renewal, and the date by which a consumer has to cancel and avoid fees.
The bill received bipartisan support in the House Consumer Protection Committee and now awaits approval on the House floor.
“Too often, too many people get reeled into overpaying for products because of an attractive promotional offer without really knowing what happens after its expiration,” said Scherer. “Businesses and consumers win when clear communication and transparency are prioritized.”