Consumer Protection

Plain English Breakdown

The bill text does not specify that termination must occur exclusively online, only that it can be done so.

Tennessee Consumer Protection Act

This bill creates rules for businesses offering automatic renewals or continuous services in Tennessee, ensuring clear communication with consumers about costs and cancellation options.

What This Bill Does

• Requires businesses to clearly explain the terms of automatic renewal offers before a consumer agrees to them.
• Prohibits businesses from automatically charging customers without their explicit consent, especially for free trials or promotions.
• Ensures that businesses provide clear information on how to cancel services and refunds any promotional discounts before they expire.
• Requires businesses to give consumers notice about upcoming charges if the automatic renewal happens more than 60 days after initial agreement.
• Provides a toll-free telephone number, email address, postal address or another cost-effective mechanism for cancellation that must be described in the acknowledgment.

Who It Names or Affects

• Consumers who sign up for services with automatic renewals or continuous service offers in Tennessee.
• Businesses that offer automatic renewal services or continuous service offers to Tennessee residents.

Terms To Know

Affirmative consent

A clear, positive action by a consumer agreeing to the terms of an automatic renewal or continuous service offer.

Promotional price

A discounted rate offered for a limited time, excluding free gifts or trials.

Limits and Unknowns

• The bill does not apply to certain financial institutions and utility companies regulated by specific state or federal agencies.
• It is unclear how the new rules will be enforced and what penalties businesses might face if they do not comply.

Official Summary Text

This bill enacts the
"Tennessee Consumer Protection and Subscr
iption Renewal Act
,
"
which requires a
business that makes an automatic renewal offer or continuous service offer to a consumer in this state
to do all of the following
:



Present the automatic renewal offer terms or continuous service offer terms in a clear and conspicuous manner before the subscription or purchasing agreement is fulfilled and in visual proximity, or in the case of an offer conveyed by voice, in temporal proximity, to the request for consent to the offe
r;



If the offer also includes a free gift or trial, or use of a promotional or discounted price, include
in the offer
a clear and conspicuous explanation of the price that will be charged after the trial or promotional period ends, or the manner in which the subscription or purchasing agreement pricing will change upon conclusion of the trial or promotional period
;



Obtain the consumer's affirmative consent to the agreement containing the automatic renewal offer terms or continuous service offer terms

before charging the consumer's credit or debit card, or the consumer's account through a third party, for an automatic renewal offer or continuous service offer; provided, the business
must
not require submission of credit or debit card information, or other payment information
,
for an offer containing a free gift or trial
;



If the automatic renewal will occur more than
60
days after affirmative consent is obtained,
provide
a clear and conspicuous notice to the consumer of when the business will charge the consumer for the automatic renewal or continuous service
;



If the automatic renewal will occur one year or more from the date the affirmative consent is obtained, provide a clear and conspicuous notice of the upcoming charge between
15
and
45
days before the date the business will charge the consumer for the automatic renewal or continuous service
;



Provide an acknowledgment that includes the automatic renewal offer terms or continuous service offer terms, cancellation policy, and information regarding how to cancel in a manner that is capable of being retained by the consumer
;



If the automatic renewal offer or continuous service offer includes an initial promotional or discounted price, disclose in the acknowledgment how to cancel, and allow the consumer to cancel, the automatic renewal or continuous service before the consumer pays for the goods or services
;



Provide a separate notice that the automatic renewal or continuous service will automatically renew and continue for the duration chosen by the consumer or, if no duration is chosen, until the consumer cancels the subscription or service
; and



Obtain the consumer's affirmative consent to the notice
.

This bill prohibits
a business
from
chang
ing
an automatic renewal offer or continuous service offer that includes a free gift or trial to the fully priced subscription or service, or begin
ning
automatic renewal of the subscription or service, without first obtaining affirmative consent from the cons
umer. At the end of the free gift or trial period, the business
must (i) p
resent the offer terms, acknowledgment, and notice required under
this bill
; and
(ii) obtain
the consumer's affirmative consent to the offer terms, acknowledgment, and notice.
Addi
tionally, a
business
must
not require a consumer in this state to provide a credit or debit card, or other payment information, for a free gift or trial of an automatic renewal subscription or continuous service.

This bill requires a
business that makes
an automatic renewal offer or continuous service offer
to
provide a toll-free telephone number, electronic mail address, a postal address if the seller directly bills the consumer, or another cost-effective, timely, and easy-to-use mechanism for cancellati
on that must be described in the acknowledgment.

This bill requires a
business that allows a consumer to accept an automatic renewal or continuous service offer online
to
allow the consumer to terminate the automatic renewal or continuous service exclusi
vely online, which may include a termination email formatted and provided by the business that a consumer can send to the business without additional information.

MATERIAL CHANGES

If a material change in the terms of the automatic renewal or continuous
service has been accepted by a consumer in this state, then
this bill requires
the business
to
provide the consumer with a clear and conspicuous notice of the material change and provide information regarding how to cancel the automatic renewal or continuo
us service in a manner that is capable of being retained by the consumer.
Additionally, before
a business makes a material change to the terms of the automatic renewal or continuous service that will incur a financial cost to the consumer, the business
mu
st
obtain the consumer's affirmative consent to the material change.

This bill provides that a consumer
affected by a business's failure to comply with
the above provisions relative to material changes
may bring an action in court. A court that finds
a
violation
may fine the business no more than $5,000
and
may award to the prevailing party
p
unitive damages and
c
ourt costs and fees, including attorney fees.

EXEMPTIONS

This bill does not apply to any of the following:



A state or national bank or trust company insured by the federal deposit insurance corporation or an operating subsidiary of that bank or trust company
;


A state or federal credit union insured by the national credit union administration
;


An individual or entity licensed by the department of financial institutions
;


A service provided by a business, or its affiliate, pursuant to
(i) a
franchise issued by a political subdivision of this state; or
(ii) a
license, franchise, certificate, or other authorization issued by the Tennessee public utility commission
;


An individual or business, or an affiliate of the individual or business, regulated by the Tennessee public utilities commission, the federal communications commission, or the federal energy regulatory commission
;


A business licensed under
the insurance law of this state
or an affiliate of the business
; and


A person or entity providing
certain
service contracts
as described in the insurance law of this state
, or an affiliate of the person or entity
.

Current Bill Text

SENATE BILL 302
By Harshbarger

HOUSE BILL 420
By Rudd

HB0420
000047
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 45;
Title 47; Title 56 and Title 65, relative to consumer
protection.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 47-18-133, is amended by deleting
the section and substituting:
(a) This section is known and may be cited as the "Tennessee Consumer
Protection and Subscription Renewal Act."
(b) As used in this section:
(1) "Affirmative consent":
(A) Means a clear, affirmative act signifying a consumer's freely
given, specific, informed, and unambiguous agreement to the automatic
renewal offer terms or continuous service terms; and
(B) Includes a written statement, including a statement written by
electronic means, or an unambiguous affirmative action;
(2) "Consumer" means an individual who acquires goods or services for
personal, family, or household purposes; and
(3) "Promotional or discounted price" does not include a free gift or trial.
(c) A business that makes an automatic renewal offer or continuous service offer
to a consumer in this state shall:
(1) Present the automatic renewal offer terms or continuous service offer
terms in a clear and conspicuous manner before the subscription or purchasing
agreement is fulfilled and in visual proximity, or in the case of an offer conveyed

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by voice, in temporal proximity, to the request for consent to the offer. If the offer
also includes a free gift or trial, or use of a promotional or discounted price, then
the offer must include a clear and conspicuous explanation of the price that will
be charged after the trial or promotional period ends, or the manner in which the
subscription or purchasing agreement pricing will change upon conclusion of the
trial or promotional period;
(2)
(A) Obtain the consumer's affirmative consent to the agreement
containing the automatic renewal offer terms or continuous service offer
terms, including the terms of an automatic renewal offer or continuous
service offer that is made at a promotional or discounted price for a
limited period of time, before charging the consumer's credit or debit card,
or the consumer's account through a third party, for an automatic renewal
offer or continuous service offer; provided, that the business shall not
require submission of credit or debit card information, or other payment
information for an offer containing a free gift or trial; and
(B) If the automatic renewal will occur more than sixty (60) days
after affirmative consent is obtained in accordance with subdivision
(c)(2)(A), then the entity with the direct billing relationship with the
consumer must provide a clear and conspicuous notice to the consumer
of when the business will charge the consumer for the automatic renewal
or continuous service. If the automatic renewal will occur one (1) year or
more from the date the affirmative consent is obtained in accordance with
subdivision (c)(2)(A), then the entity with the direct billing relationship with
the consumer must provide a clear and conspicuous notice of the

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upcoming charge between fifteen (15) and forty-five (45) days before the
date the business will charge the consumer for the automatic renewal or
continuous service;
(3) Provide an acknowledgment that includes the automatic renewal offer
terms or continuous service offer terms, cancellation policy, and information
regarding how to cancel in a manner that is capable of being retained by the
consumer. If the automatic renewal offer or continuous service offer includes an
initial promotional or discounted price, then the business shall also disclose in the
acknowledgment how to cancel, and allow the consumer to cancel, the automatic
renewal or continuous service before the consumer pays for the goods or
services; and
(4)
(A) Provide a separate notice that the automatic renewal or
continuous service will automatically renew and continue for the duration
chosen by the consumer or, if no duration is chosen, until the consumer
cancels the subscription or service; and
(B) Obtain the consumer's affirmative consent to the notice
required by subdivision (c)(4)(A).
(d)
(1) In addition to the affirmative consent required under subdivision
(c)(2), a business shall not change an automatic renewal offer or continuous
service offer that includes a free gift or trial to the fully priced subscription or
service, or begin automatic renewal of the subscription or service, without first
obtaining affirmative consent from the consumer. At the end of the free gift or
trial period, the business shall:

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(A) Present the offer terms, acknowledgment, and notice required
under subdivisions (c)(1), (3), and (4); and
(B) Obtain the consumer's affirmative consent to the offer terms,
acknowledgment, and notice.
(2) A business shall not require a consumer in this state to provide a
credit or debit card, or other payment information, for a free gift or trial of an
automatic renewal subscription or continuous service.
(e) A business that makes an automatic renewal offer or continuous service offer
shall provide a toll-free telephone number, electronic mail address, a postal address if
the seller directly bills the consumer, or another cost-effective, timely, and easy-to-use
mechanism for cancellation that must be described in the acknowledgment specified in
subdivision (c)(3).
(f) A business that allows a consumer to accept an automatic renewal or
continuous service offer online shall allow the consumer to terminate the automatic
renewal or continuous service exclusively online, which may include a termination email
formatted and provided by the business that a consumer can send to the business
without additional information.
(g)
(1) If a material change in the terms of the automatic renewal or
continuous service has been accepted by a consumer in this state, then the
business shall provide the consumer with a clear and conspicuous notice of the
material change and provide information regarding how to cancel the automatic
renewal or continuous service in a manner that is capable of being retained by
the consumer.
(2)

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(A) In addition to providing the notice required under subdivision
(g)(1), before a business makes a material change to the terms of the
automatic renewal or continuous service that will incur a financial cost to
the consumer, the business shall obtain the consumer's affirmative
consent to the material change.
(B) A consumer affected by a business's failure to comply with
subdivision (g)(2)(A) may bring an action in a court of competent
jurisdiction. A court that finds that the business violated subdivision
(g)(2)(A) may fine the business no more than five thousand dollars
($5,000). In addition, the court may award to the prevailing party:
(i) Punitive damages; and
(ii) Court costs and fees, including attorney fees.
(h) This section does not apply to:
(1) A state or national bank or trust company insured by the federal
deposit insurance corporation or an operating subsidiary of that bank or trust
company;
(2) A state or federal credit union insured by the national credit union
administration;
(3) An individual or entity licensed by the department of financial
institutions;
(4) A service provided by a business, or its affiliate, pursuant to:
(A) A franchise issued by a political subdivision of this state; or
(B) A license, franchise, certificate, or other authorization issued
by the Tennessee public utility commission;

- 6 - 000047

(5) An individual or business, or an affiliate of the individual or business,
regulated by the Tennessee public utilities commission, the federal
communications commission, or the federal energy regulatory commission;
(6) A business licensed under title 56 or an affiliate of the business; or
(7) A person or entity providing service contracts as defined in § 56-2-
126, or an affiliate of the person or entity.
SECTION 2. This act takes effect July 1, 2025, the public welfare requiring it, and
applies to conduct occurring on or after that date.