New Illinois Law Strengthens Consumer Protections Against Automatic Contract Renewals

Illinois has strengthened protections for consumers against the potential pitfalls of automatic contract renewals. The latest amendment to the Automatic Contract Renewal Act, which was recently passed by the Illinois General Assembly, aims to ensure that consumers are fully informed and agree explicitly to contractual terms that extend automatically.

Under the new provisions of the law, any business offering services or products that include automatic renewals must clearly and conspicuously disclose the terms associated with the automatic renewal. This disclosure must occur before the initial agreement is completed, ensuring that consumers are not unwittingly locked into recurring billing cycles.

Key requirements for businesses include:

• Clear Disclosure: Terms of automatic renewals must be clearly presented in proximity to where consent is given, ensuring consumers understand what they are agreeing to.
• Consent Prior to Charging: Businesses are prohibited from charging consumers via automatic renewals without obtaining clear consent.
• Acknowledgment of Terms: Consumers must receive an acknowledgment that includes the automatic renewal terms, cancellation policy, and instructions on how to cancel in a format that can be retained.
• Free Trials and Promotions: For contracts that begin with a free trial or promotional period lasting 15 days or more, businesses must notify consumers of the impending end of the trial at least three days before the cancellation deadline.

Additionally, for contracts lasting 12 months or more that will renew for more than one month, businesses must provide written notice to consumers between 30 and 60 days before the renewal deadline. This notice must include information on how to cancel and the deadline for cancellation to avoid charges for a subsequent term.

The law also facilitates easier cancellation processes, especially for services agreed to online. Businesses must offer a simple, online cancellation option that matches the medium through which the consumer engaged the service.