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A BILL TO BE ENTITLED
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AN ACT
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relating to requirements for subscription service contracts. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Title 12, Business & Commerce Code, is amended by |
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adding Chapter 608 to read as follows: |
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CHAPTER 608. SUBSCRIPTION SERVICE CONTRACTS |
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Sec. 608.001. DEFINITIONS. In this chapter: |
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(1) "Automatic renewal clause" means a provision of a |
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contract that extends the term of or renews a contract if the |
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consumer does not take a specified action. |
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(2) "Consumer" means a person who acquires goods or |
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services for personal, family, or household purposes. |
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(3) "Service provider" means a business that provides |
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a service to a consumer. |
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(4) "Subscription service" means a service provided by |
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a service provider to a consumer under a contract that: |
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(A) has an automatic renewal clause; or |
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(B) continues indefinitely until canceled by a |
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party. |
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Sec. 608.002. NOTICE REQUIREMENTS FOR SUBSCRIPTION SERVICE |
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CONTRACTS. (a) If a service provider and a consumer enter into a |
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contract for a subscription service, the service provider shall: |
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(1) at the time the service provider enters into the |
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contract with the consumer, clearly and conspicuously disclose to |
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the consumer the: |
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(A) nature of the contract; and |
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(B) procedure for canceling the contract; |
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(2) if the contract has a term of six months or more |
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and automatically renews for a term of at least one month, give the |
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consumer additional written notice of the automatic renewal and the |
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procedure for canceling the contract not earlier than the 90th day |
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and not later than the 15th day before the date the contract is set |
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to renew; and |
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(3) if the contract does not automatically renew but |
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continues until canceled, give the consumer additional written |
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notice of an upcoming payment not earlier than the 30th day and not |
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later than the fifth day before the date the payment is due. |
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(b) A service provider may provide the written notice |
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required under Subsection (a)(2) or (3): |
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(1) by regular mail or certified mail; |
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(2) on an invoice delivered to the consumer; or |
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(3) by written electronic communication, including |
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electronic mail, if agreed to by the consumer. |
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(c) Notice provided under Subsection (b) must be clear and |
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conspicuous. For purposes of Subsection (b)(1), the service |
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provider may assume that written notice sent by regular mail is |
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received by the consumer on the third business day after the date |
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the notice is deposited in the mail. |
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Sec. 608.003. METHOD OF CANCELLATION. (a) A service |
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provider shall allow a consumer to cancel a contract for a |
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subscription service by using the same method as the consumer used |
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to enter into the contract, including allowing cancellation online, |
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by mail, or by telephone. |
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(b) This section does not prohibit the service provider from |
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allowing the consumer to cancel a contract by additional methods. |
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Sec. 608.004. DECEPTIVE TRADE PRACTICE. (a) Except as |
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provided by Subsection (b), a violation of this chapter is a false, |
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misleading, or deceptive act or practice as defined by Section |
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17.46(b), and any remedy under Subchapter E, Chapter 17, is |
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available for a violation of this chapter. |
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(b) A violation of this chapter is not a false, misleading, |
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or deceptive act or practice if the service provider can |
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demonstrate that: |
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(1) as a part of its routine business practice, the |
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service provider has established and implemented written |
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procedures to comply with this chapter and enforces compliance with |
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the procedures; |
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(2) the violation of this chapter is the result of |
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error; and |
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(3) the service provider prospectively canceled the |
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contract for the subscription service within a reasonable time |
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after becoming aware of the error that caused the violation of this |
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chapter, without penalty to the consumer, and has not subsequently |
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automatically renewed or revived that same contract. |
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(c) Subsection (b)(3) does not relieve a consumer of the |
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consumer's duties under a contract before the date the contract is |
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canceled. |
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SECTION 2. Chapter 608, Business & Commerce Code, as added |
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by this Act, applies only to a contract entered into or renewed on |
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or after the effective date of this Act. |
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SECTION 3. This Act takes effect September 1, 2021. |