Advertising Law Blog

Automatic Renewal Online Cancellation Mechanism

The law expands Vermont’s automatic renewal law relating to consumer contracts with a minimum initial term of one year that renews for a subsequent term that is longer than one month. (You can read our client alert on the prior law here). Once the new law goes into effect, sellers who utilize such contracts must provide the consumer with a toll-free telephone number, e-mail address, a postal address if the seller directly bills the consumer, or “another cost-effective, timely, and easy-to-use mechanism for canceling the contract.” Importantly, like California, if the consumer accepted the one-year initial-term automatic renewal contract online, then the seller must permit the consumer to terminate the contract “exclusively online.” 

Privacy Issues

The new Vermont law requires state agencies to conduct a data privacy inventory, addressing the collection and management of personally identifiable information, street addresses, e-mail addresses, telephone numbers and demographic information. In addition, the state agencies are required to submit “recommendations for proposed legislation concerning the collection and management of personally identifiable information.” A report presenting such recommendations and findings is to be submitted by January 15, 2021.

The new law also broadens Vermont’s security breach notification statute to include biometric information, genetic information and health records in the definition of “personally identifiable information.”

Senate Bill 110 adds a new subchapter on student privacy that applies to operators of websites, online services, online application or mobile applications that are used, designed and marketed primarily for PreK – 12 school purposes. Such operators are prohibited from engaging in targeted advertising, creating a profile about a PreK – 12 student (except in furtherance of PreK – 12 school purposes), and selling a student’s information. In addition, such operators are required to implement and maintain reasonable security measures to protect this information, and must delete a student’s covered information if the school or district requests deletion.

Enforcement

Compliance with Vermont’s consumer protection laws is critical for both in-state and national companies that do business in Vermont or with Vermont consumers. Marketers should be sure to examine their automatic renewal programs and cancellation procedures to ensure compliance before the law goes into effect. Private plaintiffs have initiated certain class action lawsuits against national marketers for allegedly failing to address Vermont’s unique requirements. These types of lawsuits are likely to increase as a result of this new legislation.