Monday, March 19, 2012
Benson & Moriarty Bill to Help Prevent Consumers from Getting Roped Into Endless Contracts Advancing Toward Law
(TRENTON) – A consumer protection measure sponsored by Assembly Democrats Dan Benson and Paul Moriarty was approved Monday by the Assembly, moving New Jersey closer to requiring notification to customers when a contract is to be automatically renewed.
“So many highly-used services out there today include automatic renewal clauses in their contracts,” said Benson (D-Mercer/Middlesex). “In an era of paperless billing and automatic charges to credit cards or bank accounts, consumers often get perpetually roped into extended and costly contracts. By requiring these terms to be clearly displayed and advance notice before renewal, this bill will give consumers the opportunity to make more informed choices for themselves.”
This bill (A-1585) establishes notification standards regarding service contracts that contain automatic renewal provisions. A service contract is defined as a written contract for the performance of service, maintenance or repair over a fixed period of time in connection with real property.
“Sometimes contracts are entered into a year, or even two years, before the automatic renewal clause kicks in,” said Moriarty (D-Gloucester/Camden). “This bill will protect consumers by ensuring that they have the opportunity to cancel any unwanted service prior to renewal of an additional term.”
The bill was approved 72-6 and will be referred to the Senate for more consideration.