KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Correction re Colorado automatic renewal law
June 1, 2023
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Correction re Colorado automatic renewal law from article on May 22, 2023
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Ken,
Where are you finding support that it does not apply to m-t-m renewals? We’ve looked at the law extensively and have talked at length about it with others, and I’ve not heard anyone come to the conclusion that it doesn’t apply to m-t-m agreements. In fact, we’ve been working with ADT’s government affairs coordinator trying to figure out if there was a way to get a m-t-m exclusion into the law.
Thanks for the posting.
Nick
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Response
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Thanks for pointing out my error regarding the month to month exclusion, which I believe is present in all other states with automatic renewal law. I just looked at it again and you're right, though the notice required is different for month to month [or less than 12 month renewal] because you only have to give it once.
The law includes:
(b) A person that sells a good or service to a consumer pursuant to an automatic renewal contract shall send the notice described in subsection (4)(a) of this section at least twenty-five and no more than forty days before the first automatic renewal and at least twenty-five and no more than forty days before each automatic renewal thereafter; except that, if the initial automatic renewal or any subsequent automatic renewal is for a term of less than twelve months, the person shall send the notice:(I) At least once in the period between twenty-five and forty days directly preceding the first automatic renewal that would extend the contract beyond a continuous twelve-month period; and(II) At least once in the period between twenty-five and forty days directly preceding any subsequent automatic renewal that would extend the contract beyond any additional consecutive and continuous twelve-month period.
Looks like for month to month only one notice will be required prior to the first month renewal. The contract also has to have certain font and placement criteria. Here is the statute and my interpretation:
1) As used in this section, unless the context otherwise requires:(a) "Automatic renewal contract" means a plan or arrangement in which a paid subscription or purchasing agreement is automatically renewed at the end of a definite term for a subsequent term or on a continuous or recurring basis.
The RMR alarm contract fits this criteria. It’s for a definite term [1,3 5 or whatever] and will renew thereafter
(b) "Automatic renewal offer terms" means the following clear and conspicuous disclosures:(I) That an automatic renewal contract will automatically renew or extend after the initial period for a set term not to exceed one year unless the consumer gives express written consent for a longer renewal term;
Month to month renewal and in fact any renewal term less than 12 months would not require affirmative consent, just the notice
(II) A description of the cancellation policy that applies to the offer;
The alarm contract has this notice how to cancel
(III) Any recurring charges that will be charged to the consumer's credit card, debit card, or payment account with a third party as part of an automatic renewal contract;
RMR continues and can be increase every 12 months per the contract
(IV) The length of an automatic renewal term;
Month to month, or less than 12 months unless you want to have to give notice again
and(V) The minimum purchase obligation, if any.
This appears not to be applicable
(c)(I) "Clear and conspicuous" or "clearly and conspicuously" means in larger type than the surrounding text; in contrasting type, font, or color to the surrounding text of the same size; or set off from the surrounding text of the same size by symbols or other marks in a manner that clearly calls attention to the language.
Must be conspicuous with difference font
Notice of the renewal has to be by
(I) Physical mail;
(II) E-mail; or
(III) Another easily accessible form of communication, such as a text message or a mobile phone application, if the consumer specifically authorizes the person to provide notice in such form or if the consumer customarily uses such form to communicate with the person.
Finally, the statute describes the way you must accept a cancellation:
(d) Fail to provide a simple, cost-effective, timely, easy-to-use, and readily accessible mechanism for canceling an automatic renewal contract or trial period offer. A person is deemed to comply with this subsection (2)(d) if the person offers:
(I) A one-step online cancellation link that is:(A) Located on the person's website or contained in an electronic device or service or an electronic communication to the consumer; and(B) Available to the consumer immediately or after the consumer completes a reasonable authentication protocol used solely to confirm that the consumer is authorized to make changes to the account; or
(II) An in-person mechanism for canceling an automatic renewal contract or trial period offer, which mechanism:(A) Is at a physical location where the consumer regularly utilizes any goods or services that are subject to the automatic renewal contract; and (B) Satisfies the requirements of this subsection (2)(d).
This Colorado law should be amended quickly to protect the public, the alarm consumer, not so much the alarm companies, because if the alarm companies simply decide to remove the automatic renewal and terminate service without notice when the contract expires the consequences are going to be much worse than the legislature might imagine, if they gave it any thought at all. I am reminded of the Arkansas law that prohibited automatic renewal for alarm companies, period, and then had to revise the law quickly when reality set in.
In the meantime, give notice if you’re in Colorado.
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
www.KirschenbaumEsq.com
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