THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY ARGALL, RAFFERTY, M. WHITE, FONTANA, GREENLEAF, WAUGH, VOGEL, WASHINGTON, MENSCH, BOSCOLA AND FARNESE, MAY 16, 2011

REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE, MAY 16, 2011  

AN ACT

Providing for automatic renewal provisions in certain service

contracts.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Short title.

This act shall be known and may be cited as the Service

Contract Automatic Renewal Act.

Section 2.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Automatic renewal provision."  A provision of a service

contract under which the service contract is renewed for a

specified period of more than one month if the renewal causes

the service contract to be in effect more than six months after

the effective date of the service contract. The renewal is

effective unless the consumer gives notice to the seller of the

consumer’s intention to terminate the service contract.

"Consumer."  An individual who receives service, maintenance

or repair under a service contract. The term does not include an

individual engaged in business or employed by or otherwise

acting on behalf of a governmental entity if the individual

enters into the service contract as part of or ancillary to the

individual's business activities or on behalf of the business or

governmental entity.

"Seller."  A person, firm, partnership, association or

corporation engaged in commerce that sells, leases or offers to

sell or lease a service to a consumer under a service contract.

"Service contract."  A written agreement for the performance

of a service over a fixed period of time or for a specified

duration.

Section 3.  Service contracts with automatic renewal provisions.

(a)  General rule.--A seller that enters or attempts to enter

into a service contract that includes an automatic renewal

provision, unless the consumer cancels the service contract,

shall disclose the automatic renewal provision clearly and

conspicuously in the service contract or service contract offer.

(b)  Notification prior to contract cancellation.--

(1) A seller that has entered into a service contract,

that automatically renews for a specified period of more than

one month unless the consumer cancels the contract, shall

provide the consumer with written or electronic notification,

which shall include a form of receipt confirmation, of the

automatic renewal provision.

(2)  The notification required under this subsection

shall be provided to the consumer not less than 30 days nor

more than 60 days before the cancellation deadline under the

automatic renewal provision.

(c)  Contents of notice.--The notification required under

subsection (b) shall disclose clearly and conspicuously:

(1)  That unless the consumer cancels the contract, the

contract will automatically renew.

(2)  The method by which the consumer may obtain details

of the automatic renewal provision and cancellation

procedure, whether by contacting the seller at a specified

telephone number or address, by referring to the contract or

by any other method.

(d)  Violations.--A seller that fails to comply with the

requirements of this section is in violation of this act unless

the seller demonstrates that:

(1)  As part of the seller's routine business practice,

the seller has established and implemented written procedures

to comply with this section and enforces compliance with the

procedures.

(2)  The failure to comply is the result of an

unintentional error.

(3)  As part of the seller's routine business practice,

where an unintentional error has caused the failure to comply

with this subsection, the unearned portion of the contract

subject to the automatic renewal provision is refunded as of

the date on which the seller is notified of the error.

(e)  Void provisions.--An automatic renewal provision of a

service contract that is in violation of this act, except as

otherwise provided under subsection (d), is void and

unenforceable in this Commonwealth.

Section 4.  Enforcement.

A violation of this act shall constitute an unfair or

deceptive trade or practice for purposes of the act of December

17, 1968 (P.L.1224, No.387), known as the Unfair Trade Practices

and Consumer Protection Law, and shall be subject to the penalty

and enforcement provisions of that act.

Section 5.  Effective date.

This act shall take effect in 60 days.