Does the California Automatic Renewal Law Apply to My Subscription?
I launched a subscription product. Signing up takes 20 seconds. Canceling takes an email to support, a reply, and sometimes a short conversation about whether the customer really wants to leave.
My retention numbers probably look better for it. I have never checked whether that gap is something California regulates, or what it costs me if it is.
What Does the California Automatic Renewal Law Require?
California’s automatic renewal rules sit in the Business and Professions Code at Sections 17600 through 17606. Section 17602 makes it unlawful for a business making an Automatic Renewal Offer to do any of the following, among others:
- Fail to present the renewal terms in a clear and conspicuous manner before the subscription is fulfilled.
- Fail to obtain the consumer’s express affirmative consent to the automatic renewal.
- Fail to maintain verification of that consent for at least three years.
- Fail to provide a notice, before billing information is confirmed, stating that the service renews automatically unless canceled, the length and terms of the renewal period, the cost and billing frequency, and how to cancel.
What Changed Recently?
Section 17602 was amended by Assembly Bill 2863, effective January 1, 2025. The amended section requires a cancellation method that is available through the same medium the consumer used to enroll. For online subscriptions that means either a prominently located direct link or button, or an immediately accessible termination email the consumer can send.
The section also addresses retention offers. A business may present a discount when a consumer asks to cancel, but the ability to cancel must remain available if the consumer declines it. A save flow is permitted. A save flow that becomes the only exit is not.
What Else Does the Section Require?
Two notice obligations catch teams by surprise. Where a consumer accepted a free gift or trial lasting more than 31 days, a notice must be provided at least three days and at most 21 days before the trial expires. And under an annual automatic renewal agreement, the business must send an annual reminder disclosing the service, the charges, and how to cancel.
Common Mistakes Founders Make
- Treating renewal terms as boilerplate for the Terms of Use. The obligation focuses on what the consumer sees at enrollment. Terms reachable only through a link may not be clear and conspicuous at the point of consent.
- Building a cancellation path harder than the sign-up path. Support-only cancellation and multi-step save flows are precisely what the amended section addresses.
- Not keeping consent records. The section requires verification of affirmative consent to be retained. If you cannot produce the screen a customer saw, you cannot show what they agreed to.
A Quick Founder Check
- On the screen where a customer commits to pay, are the renewal price, frequency, and automatic renewal visible without clicking anything?
- Is there a consent action specific to the recurring charge, separate from agreeing to the Terms?
- Can a customer cancel online, through the same channel they signed up in?
- Do we retain verification of affirmative consent, and for how long?
- For trials longer than 31 days, do we send notice inside the three to 21 day window?
- For annual plans, do we send an annual reminder?
The Bottom Line
Auto-renewal compliance is unusual in that remediation is normally cheap and exposure is normally large, because a defect in your checkout page affects every customer who ever used it. The work is a review of two screens: where money is committed, and where it stops.
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