Published Sunday, February 24, 2013

Georgia Legislature: House passes Smith's automatic renewal provision

From Special Reports

The Georgia House of Representatives passed House Bill 234 Thursday with a vote of 167 to 2.

Introduced by state Representative Lynn Smith, R-Newnan, HB 234 would provide consumers with a written notice prior to the automatic renewal of a service contract.

“House Bill 234 will alert the consumer to an automatic renewal provision in a service contract,” said Smith.

“HB 234 is aimed at protecting the rights of consumers,” she added.

This legislation is designed to help the consumers who may enter into contracts without knowing about automatic renewal clauses beforehand.”

HB 234 requires sellers to notify consumers of any automatic renewal provisions that may be included in their service contracts.

It would also require that the automatic provision be clearly and conspicuously disclosed in the contract.

This bill does not apply to a person engaged in business or employed by or otherwise acting on behalf of a governmental entity if the person enters into the service contract as part of or ancillary to the person’s business activities or on behalf of the business or governmental entity.

At least 10 other states have passed similar automatic renewal legislation aimed at consumer protection.

Smith felt the need to introduce this piece of legislation after hearing the concerns of her constituents regarding their issues with automatic renewal provisions.

She was contacted by a facilities manager of a church in House District 70 who was a victim of an unwanted automatic renewal contract without his knowledge.

Automatic renewal provisions are provisions in service contracts that automatically renew the contract for the specified period of time.

HB 234 will now go to the Georgia Senate for consideration.

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