Massachusetts Automatic Renewal Cancellation Letter

Introduction

Key Things to Know

1. 1

   This letter ends a product with a Negative Option Feature, which 940 CMR 38.03 defines as a contract provision under which your silence or failure to take affirmative action to reject a good or service, or to cancel or non-renew an agreement, is interpreted by the seller as acceptance or continuing acceptance. The definition names an automatic renewal, a continuity plan, a free-to-pay or fee-to-pay conversion, and a pre-notification negative option plan. The letter fixes when and how you ended yours.

2. 2

   These duties come from a regulation, not a statute. The Attorney General issued 940 CMR 38.00 under Chapter 93A, Section 2(c), which lets that office make rules interpreting the ban on unfair or deceptive acts in trade or commerce. The rule reaches advertising, marketing, solicitation or an offer of sale that is Targeted To or results in a sale in Massachusetts, and its definition of Product, meaning goods or services for personal, family, or household use, expressly includes memberships and subscriptions.

3. 3

   Section 38.05(3) sets the exit route. A seller commits an unfair and deceptive practice by failing to provide a simple mechanism for you to cancel the Negative Option Feature, avoid being charged and immediately stop any recurring charges. Paragraph (a) requires that mechanism to be at least as easy to access and use as the method you used to initiate the feature, and paragraph (b) requires it, at a minimum, through the same medium, such as Internet, telephone, mail, or in person.

4. 4

   Paragraph (b) then spells out each medium. Internet cancellation must be available through the same website or web-based application you used to sign up. Telephone cancellation needs a number whose calls are answered promptly during normal business hours and cost no more than the call you used to enroll. For in-person sales, the seller must offer an Internet or telephone route, in addition to, where practical, an in-person method similar to the one you used.

5. 5

   Longer plans carry a reminder duty. Under 38.05(4), for a Negative Option Feature exceeding 31 days the seller must send written notice no more than 30 and no fewer than five calendar days before the date by which you must cancel, disclosing the financial obligations, every Product involved, the cancellation mechanism, the cancel-by calendar date and the date the charge will be incurred. Subsection 5 requires that notice through a medium substantially similar to the one you used or one you affirmatively chose.

6. 6

   Shorter plans and trials have separate rules. For a contract with a Negative Option Feature of 31 days or less, 38.05(6) accepts either the subsection 4 notice or a disclosure, at least as frequently as you are charged, of the amount charged at auto renewal and how to cancel. For any Trial Offer, 38.05(1) requires written disclosure before you accept of the financial obligations, the Products, how to cancel, the cancel-by calendar date and the date the obligation starts.

7. 7

   The consequence runs through Chapter 93A. The opening words of 38.05 make each listed failure an unfair and deceptive practice under Section 2. Section 9(1) lets a person injured by a practice declared unlawful by Section 2 or any rule or regulation issued thereunder bring an action, and Section 9(3) sets recovery at actual damages or twenty-five dollars, whichever is greater, or up to three but not less than two times that amount for a willful or knowing violation. Attorney review is available as an option.

Massachusetts Requirements for Automatic Renewal Cancellation Letter

• The Negative Option Feature You Are Ending

  Name the plan and say which kind of Negative Option Feature it is under 940 CMR 38.03: an automatic renewal, a continuity plan, a free-to-pay or fee-to-pay conversion, or a pre-notification negative option plan. The rule covers goods and services for personal, family, or household use, and its definition of Product expressly includes memberships and subscriptions.

• Whether a Section 38.06 Safe Harbor Applies

  Check the seller against 940 CMR 38.06 before citing 38.05. Creditors complying with Chapter 140D and Truth in Lending rules, securities registrants complying with Chapter 110A, and health care providers complying with Chapter 111, Section 228 are treated as complying. Section 38.08 adds that the rule applies unless preempted by federal law.

• Your Enrollment Medium and Date

  Record whether you enrolled through a website or app, by telephone, by mail or in person, and when. 940 CMR 38.05(3)(a) and (b) measure the cancellation mechanism against that method: at least as easy to access and use, and available at a minimum through the same medium.

• Each Cancellation Attempt Against Paragraph (b)

  For Internet cancellation, note whether the option sat on the same website or web-based application you used. For telephone cancellation, note whether calls were answered promptly during normal business hours and cost no more than the enrollment call. For an in-person sale, note whether an Internet or telephone route existed. Give the date and outcome of each attempt.

• The Renewal Notice for Terms Over 31 Days

  Under 940 CMR 38.05(4), notice was due no more than 30 and no fewer than five calendar days before your cancel-by date, listing the financial obligations, the Products, the cancellation mechanism, the cancel-by date and the charge date. Subsection 5 sets the medium. Record the date and medium of any notice.

• The Short-Plan Notice for Terms of 31 Days or Less

  For a contract of 31 days or less, 940 CMR 38.05(6) accepts either the subsection 4 notice or a disclosure, at least as frequently as you are charged, of the amount charged at auto renewal and how to cancel. Say which you received, if either.

• Trial Offer Disclosures Given Before You Accepted

  If the plan began as a Trial Offer, 940 CMR 38.05(1) required written disclosure before acceptance of the financial obligations, the Products, how to reject or cancel, the cancel-by calendar date and the date the obligation would start. Keep the sign-up page or email that shows what you were told.

• The Chapter 93A Reference, Stated Without Predicting an Outcome

  The opening words of 940 CMR 38.05 make each listed failure an unfair and deceptive practice under Chapter 93A, Section 2. Section 9 lets an injured person sue for actual damages or twenty-five dollars, whichever is greater, and two to three times that for a willful or knowing violation, after a separate written demand for relief at least thirty days before filing. Cite it factually; attorney review is available as an option.