KY lawmaker’s bill would tighten rules for costs, canceling of subscriptions, memberships
The Kentucky House is getting a bill intended to protect consumers from businesses that sell products through subscriptions or memberships with unclear prices, uncertain renewal terms and no easy way to cancel.
The House Committee on Veterans, Military Affairs and Public Protection approved House Bill 106 on Tuesday and sent it to the House floor.
The sponsor, Rep. Susan Westrom, D-Lexington, said she heard from a man whose wife had a hard time getting money refunded from her gym membership after the place closed during the COVID-19 pandemic.
Westrom said she recently had to recover money from a florist she once used that charged her for a second delivery she never ordered. She said she also dealt with “a daily important media outlet” that renewed her subscription without her permission and then sent her a follow-up collection letter.
Kentuckians who are too busy to carefully itemize their bills every month are paying money they don’t owe, the lawmaker told the House panel.
“People in this country are getting scammed and maybe don’t even realize it because they don’t pay attention to the details,” Westrom said. “Especially details in their credit card statements.”
Under Westrom’s bill, a subscription- or membership-based business would have to:
▪ Clearly explain a purchase to consumers, including the full cost that will be paid after any special introductory rate period has ended.
▪ Clearly explain how automatic renewal works and obtain the consumer’s consent before charging a credit or debit card or accessing a bank account.
▪ Provide a “timely and easy-to-use” way to cancel a subscription or membership, such as a toll-free phone number or an email or postal address. Consumers should be able to cancel a deal through the same medium they entered it, such as a website.
▪ Send renewal notices for subscriptions no fewer that 30 days but no more than 60 days from the true expiration date of the subscription.
Banks, credit unions and insurance companies would be exempt.
Each violation of the law could bring a civil penalty of up to $5,000, although businesses could claim a good-faith effort to comply as their defense.
Rep. Al Gentry, D-Louisville, told Westrom he suspects his own credit card bills include charges that he should challenge, including rental cars he’s paid for that weren’t actually there when he arrived at his destination.
“Thank you for bringing this bill,” Gentry said. “I’m making a lot of payments on things that I don’t even know they’re out there, because I don’t take the time to go through the three levels of hoops to stop the payments.”
