GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 188
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Short Title: Automatic Renewal of Contracts. |
(Public) |
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Sponsors: |
Representatives Stevens and Kidwell (Primary Sponsors). For a complete list of sponsors, refer to the North Carolina General Assembly web site. |
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Referred to: |
Judiciary 2, if favorable, State and Local Government, if favorable, Commerce and Economic Development, if favorable, Rules, Calendar, and Operations of the House |
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February 26, 2025
A BILL TO BE ENTITLED
AN ACT tO AMEND THE REQUIREMENTS FOR certain automatically renewing consumer contracts.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 75‑41 reads as rewritten:
"§ 75‑41. Contracts with automatic renewal clauses.
(a) Any person engaged in
commerce that sells, leases, or offers to sell or lease, any products or
services to a consumer pursuant to a contract where the contract
automatically renews unless the consumer cancels the contract, that
contains an automatic renewal provision for a term of more than one month shall
do all of the following:
(1) Disclose the automatic
renewal clause clearly and conspicuously in the contract or contract offer.Provide
a disclosure statement that provides notice of all of the following clearly and
conspicuously in at least 12‑point type and in bold print:
a. That the contract will be automatically renewed unless the consumer gives notice to the seller of the consumer's intention to terminate the contract prior to the renewal date. There shall be a space beside this disclosure to be initialed by the consumer acknowledging the consumer's specific consent to this provision of the contract.
b. The length of the initial term of the contract and the length of each renewal period under the contract.
c. The amount to be charged to the consumer for the initial term of the contract and the amount to be charged to the consumer for any renewal periods, if known.
d. If any terms of the contract will change upon contract renewal, a list and explanation of those terms.
e. An electronic mail address, mailing address, toll‑free telephone number, or another cost‑effective, timely, and easy‑to‑use mechanism that the consumer may use to terminate the automatic renewal. A consumer who enters into a contract online shall be permitted to cancel the contract online.
(1a) Impose no charge for an automatic renewal if the consumer did not initial the space provided beside the disclosure required in sub‑subdivision (a)(1)a. of this section.
(2) Disclose clearly and conspicuously how to cancel
the contract in the initial contract, contract offer, or with delivery of
products or services.
(3) For any automatic renewal
exceeding 60 days, of six months or more, provide written notice
to the consumer by personal delivery, electronic mail, or first‑class
mail, or any other form of notice agreed to by the consumer, at least 15
days but no earlier than 45 60 days before the date the contract
is to be automatically renewed, stating the date on which the contract is
scheduled to automatically renew and notifying the consumer that the contract
will automatically renew unless it is cancelled by the consumer prior to that
date.
(4) If the terms of the contract will change upon
the automatic renewal of the contract, disclose the changing terms of the
contract clearly and conspicuously on the notification in at least 12 point
type and in bold print.
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(d) This section does not apply to insurers licensed
under Chapter 58 of the General Statutes, or to banks, trust companies, savings
and loan associations, savings banks, or credit unions licensed or organized
under the laws of any state or the United States, or any foreign bank maintaining
a branch or agency licensed under the laws of the United States, or any
subsidiary or affiliate thereof, nor does this section apply to any entity
subject to regulation by the Federal Communications Commission under Title 47
of the United States Code or by the North Carolina Utilities Commission under
Chapter 62 of the General Statutes, or to any entity doing business directly or
through an affiliate pursuant to a franchise, license, certificate, or other
authorization issued by a political subdivision of the State or an agency
thereof.
…
(f) For purposes of this section, the term "automatic renewal provision" means a provision under which a contract is automatically renewed at the end of a definite term for a subsequent term of more than one month. Such renewal is effective unless the consumer gives notice to the seller of the consumer's intention to terminate the contract."
SECTION 2. This act becomes effective January 1, 2026, and applies to contracts entered into on or after that date.