North Carolina HB 188: Automatic Renewal of Contracts.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 4
HOUSE BILL 188
Committee Substitute Favorable 3/11/25
Committee Substitute #2 Favorable 4/15/25
Committee Substitute #3 Favorable 5/6/25

Short Title: Automatic Renewal of Contracts. (Public)
Sponsors:
Referred to:
February 26, 2025
*H188-v-4*
A BILL TO BE ENTITLED 1
AN ACT TO AMEND THE REQUIREMENTS FOR CERTAIN AUTOMATICALLY 2
RENEWING CONSUMER CONTRACTS. 3
The General Assembly of North Carolina enacts: 4
SECTION 1. G.S. 75-41 reads as rewritten: 5
"§ 75-41. Contracts with automatic renewal clauses. 6
(a) Any person engaged in commerce that sells, leases, or offers to sell or lease, any 7
products or services to a consumer pursuant to a contract where the contract automatically renews 8
unless the consumer cancels the contract, that contains an automatic renewal provision for a term 9
of more than one month shall do all of the following: 10
(1) Disclose the automatic renewal clause clearly and conspicuously in the 11
contract or contract offer.Provide a disclosure statement that provides notice 12
of all of the following clearly and conspicuously: 13
a. That the contract will be automatically renewed unless the consumer 14
gives notice to the person of the consumer's intention to terminate the 15
contract prior to the renewal date. 16
b. The length of the initial term of the contract and the length of each 17
renewal period under the contract. 18
c. The amount to be charged to the consumer for the initial term of the 19
contract and the amount to be charged to the consumer for any renewal 20
periods, if known. 21
d. If any terms of the contract will change upon contract renewal, a list 22
and explanation of those terms. 23
e. An electronic mail address, mailing address, toll-free telephone 24
number, or another cost-effective, timely, and easy-to-use mechanism 25
that the consumer may use to terminate the automatic renewal. A 26
consumer who enters into a contract online shall be permitted to cancel 27
the contract online. 28
(1a) The disclosure statement required by subdivision (1) of this subsection must 29
meet the following requirements: 30
a. If written, the required disclosure language must differ from the 31
surrounding contract terms in one or more of the following ways: 32
1. The font must be larger. 33
2. The font must be a different font. 34

General Assembly Of North Carolina Session 2025
Page 2 House Bill 188-Fourth Edition
3. The font must be a different color. 1
4. The disclosure language must be offset by symbols or other 2
marks in a manner that clearly calls attention to the language. 3
5. In no event may the font for the required disclosure be smaller 4
than the surrounding contract terms. 5
b. If audio, the required disclosure statements must be made in a volume 6
and cadence sufficient to be readily audible and understandable to the 7
consumer. 8
(1b) Impose no charge for an automatic renewal if the consumer did not give 9
consent to the agreement including the automatic renewal provision. 10
(2) Disclose clearly and conspicuously how to cancel the contract in the initial 11
contract, contract offer, or with delivery of products or services. 12
(3) For any automatic renewal exceeding 60 days, of six months or more, provide 13
written notice to the consumer by personal delivery, electronic mail, or 14
first-class mail, or any other form of notice customarily used to communicate 15
with the consumer, at least 15 days but no earlier than 45 60 days before the 16
date the contract is to be automatically renewed, stating the date on which the 17
contract is scheduled to automatically renew and notifying the consumer that 18
the contract will automatically renew unless it is cancelled by the consumer 19
prior to that date. 20
(4) If the terms of the contract will change upon the automatic renewal of the 21
contract, disclose the changing terms of the contract clearly and conspicuously 22
on the notification in at least 12 point type and in bold print. 23
... 24
(d) This section does not apply to insurers licensed under Chapter 58 of the General 25
Statutes, or to banks, trust companies, savings and loan associations, savings banks, or credit 26
unions licensed or organized under the laws of any state or the United States, or any foreign bank 27
maintaining a branch or agency licensed under the laws of the United States, or any subsidiary 28
or affiliate thereof, nor does this section apply to any entity subject to regulation by the Federal 29
Communications Commission under Title 47 of the United States Code or by the North Carolina 30
Utilities Commission under Chapter 62 of the General Statutes, or to any entity doing business 31
directly or through an affiliate pursuant to a franchise, license, certificate, or other authorization 32
issued by a political subdivision of the State or an agency thereof.Code. 33
... 34
(f) For purposes of this section, the term "automatic renewal provision" means a 35
provision under which a contract is autom