New Mexico Automatic Renewal Cancellation Letter

Introduction

Key Things to Know

1. 1

   Part 11 of Chapter 2, Title 12 of the New Mexico Administrative Code, titled Automatic Renewal of Service Contracts, governs the plan this letter ends: a service contract, defined as any contract for service, maintenance or repair, that carries an automatic renewal provision. The seller is the person providing that service, maintenance or repair. A plan that only ships goods is not described by those terms, so check what you are paying for before citing the rule.

2. 2

   An automatic renewal provision, under 12.2.11.7 NMAC, is one that renews the service contract for a specified period where the renewal causes the contract to continue in effect more than two months after the end of the original term and the renewal is effective unless you give the seller notice that you intend to terminate. The Office of the New Mexico Attorney General issued the rule under the Unfair Practices Act, and it took effect on September 15, 2009.

3. 3

   The contract itself has to carry the renewal terms. Under 12.2.11.8(A) NMAC, a consumer service contract may not contain an automatic renewal provision unless the provision is set out in a clear and conspicuous manner, in at least 10 point type, and includes the notice requirements, the specific procedure for cancelling at the end of the initial term, and the renewal terms that apply if you do not cancel.

4. 4

   The seller also owes you a written warning before each deadline. Subsection (C)(1) requires written notice specifying the cancellation procedure, clear and conspicuous and in at least 10 point type, served by certified mail or on the first page of a monthly statement at least 30 days before the last day on which you may give notice of termination, but not sooner than 60 days before that day. Subsection (B) applies the same duty before the end of each renewal term.

5. 5

   Your response window and routes come next. Subsection (C)(2) requires the seller to allow at least 30 calendar days after you receive its notice to give notice that you intend to terminate at the end of the term. Subsection (C)(3) makes it an unfair and deceptive trade practice to fail to honor a written notice sent via fax, U.S. mail, email or any other means you can reasonably rely on, if it is postmarked, time stamped or electronically date stamped within those 30 days.

6. 6

   Two further protections cover what happens after you send it. Under subsection (C)(4), a seller may not fail to honor a written notice timely sent, mailed, emailed or otherwise transmitted in a reliable manner that reaches the seller only after the notice period has expired. Under subsection (C)(5), it is an unfair and deceptive trade practice to fail to allow termination at the end of the initial term or of any renewal term without additional cost or penalty.

7. 7

   The rule rests on the Unfair Practices Act. NMSA 1978 Section 57-12-13 empowers the Attorney General to issue regulations to implement and enforce the Act, and Section 57-12-3 declares unfair or deceptive trade practices in the conduct of any trade or commerce unlawful. Section 57-12-10(B) lets a person who suffers a loss of money or property from a practice declared unlawful by the Act sue for actual damages or $100, whichever is greater, rising to three times actual damages or $300 where the conduct is found willful.

New Mexico Requirements for Automatic Renewal Cancellation Letter

• A Contract for Service, Maintenance or Repair

  12.2.11.7 NMAC defines a service contract as any contract for service, maintenance or repair, and a seller as the person providing it. Describe what the contract covers so the reader can see it fits those words.

• A Renewal Running More Than Two Months Past the Original Term

  An automatic renewal provision under 12.2.11.7 NMAC renews the contract for a specified period, keeps it in effect more than two months after the original term ends, and takes effect unless you give notice. Quote the contract's renewal clause and term.

• The Renewal Clause as Printed in Your Contract

  12.2.11.8(A) NMAC requires the provision to be clear and conspicuous, in at least 10 point type, with the notice requirements, the cancellation procedure and the renewal terms. Note the page and wording of the clause and how it describes cancelling.

• The Date and Form of the Seller's Renewal Notice

  Under 12.2.11.8(C)(1) NMAC the notice is written, in at least 10 point type, served by certified mail or on the first page of a monthly statement, at least 30 and not sooner than 60 days before your last day to give notice. Record whether and when it arrived.

• Your 30 Calendar Day Window Under Subsection (C)(2)

  The seller must allow at least 30 calendar days after you receive its notice for you to give notice of termination at the end of the initial or renewal term. Count from the date of receipt and send your letter inside that period.

• A Reliable, Date Stamped Route for Your Letter

  12.2.11.8(C)(3) NMAC covers written notice sent via fax, U.S. mail, email or other reliable means, postmarked, time stamped or electronically date stamped within the window, and (C)(4) covers a timely notice received late. Keep the confirmation or receipt.

• Any Charge for Ending the Contract at Term End

  12.2.11.8(C)(5) NMAC requires the seller to allow termination at the end of the initial or any renewal term without additional cost or penalty. List any termination fee or renewal charge with its date and amount.

• The Unfair Practices Act Reference, Stated Factually

  The rule was issued under the Unfair Practices Act. Section 57-12-3 declares unfair or deceptive trade practices unlawful and Section 57-12-10(B) provides an action for actual damages or $100, whichever is greater. Cite the rule without predicting an outcome. Attorney review is available as an option.