Porn Membership Sites with Reoccurring Billing: New Requirements for California

On July 1, 2018, California Senate Bill 313 went into effect. If you have a membership site with reoccurring billing, this affects you. You might be unaware that even prior to Senate Bill 313, California had strict requirements for online reoccurring billing.

According to Section 17602 of the California Business and Professions Code, requires businesses to:

• present auto-renewal offer terms in a clear and conspicuous manner;
• obtain the consumer’s affirmative consent before charging the consumer for an automatic renewal or continuous service;
• provide an acknowledgment that includes the offer terms, cancellation policy, and information regarding how to cancel in a manner that is capable of being retained by the consumer, as specified;
• provide a toll-free telephone number, email address, postal address (if the company directly bills the consumer), or “another cost-effective, timely, and easy-to-use mechanism” for cancellation; and
• provide clear and conspicuous notice of material changes to auto-renewal terms.

Not only do websites need to comply with these requirements, they also now need to allow clients to cancel online. No longer is it acceptable to have a client call to cancel a membership.

Under California’s current law, violations may result in civil penalties or class action lawsuits alleging violations of California’s Unfair Competition Law. Lawsuits involving auto-renewal allegations under California law have resulted in settlements of upwards of $2.5 million.

Be aware though some of these regulations apply to all websites under federal law known as Restore Online Shoppers Confidence Act (“ROSCA”). This federal statute enacted in 2010.