/>iOn July 1, 2025, Assembly Bill 2863 took effect, expanding the scope of California’s Automatic Renewal Law (ARL). The legislation includes numerous provisions applicable to businesses offering subscription-based or continuous service agreements. Notable updates include:
- Broader coverage – The ARL now applies to subscription agreements that involve free-to-paid conversions, not just paid auto-renewals.
- Affirmative consent requirement – Businesses must obtain the consumer’s express affirmative consent to the renewal or continuous service terms.
- Clarity in terms – Contracts may not include provisions that undermine or obscure the consumer’s ability to provide valid affirmative consent.
- Verification retention requirements – Businesses must retain verification of the consumer’s affirmative consent for a minimum of three years or one year following contract termination, whichever is longer.
- Annual reminders – Consumers must receive an annual reminder that includes the renewal frequency, amount charged and clear instructions for cancellation.
- Matching cancellation methods – Businesses must provide cancellation options through the same channel used to initiate the subscription (e.g., online, phone, in-store).
Next Steps for Businesses
Companies offering products or services that automatically renew should ensure that all customer interactions — from sign-up to cancellation — comply with Assembly Bill 2863.
