New Delaware law restricting auto-renewing contracts aims to protect consumers
Among the legislation that became law last week is a measure aimed at protecting consumers from contracts that renew automatically.
It requires that auto-renewal or “evergreen” clauses in contracts be presented in a clear and conspicuous manner and that sellers alert consumers of upcoming renewals. It also requires that consumers have a way to cancel contracts that is at least as easy to use as the way they signed up.
The new law passed both the state House and Senate with unanimous bipartisan support.
Gov. John Carney signed it last Wednesday surrounded by lawmakers and officials from the state Department of Justice. He says even he has “gotten caught up” in auto-renewing contracts.
“[The law] helps level the playing field between consumers and businesses, so the consumers can better protect themselves and their interests,” said Brian Eng, who heads the Consumer Mediation Unit at DOJ. “It’s going to help many, many people in the state of Delaware.”
Officials say several other states have similar measures.
State Sen. Nicole Poore (D-New Castle) was the prime sponsor of the Delaware bill.
“You shouldn’t have to look through all of your paperwork to the very, very fine print to figure out how to cancel a contract,” she said. “Or better yet, how many of you have sat for hours on the phone trying to figure out how to cancel a contract, and someone not picking up?”
The law goes into effect January 1, 2022.
Correction: A previous version of this story misstated the date the law goes into effect.