Litigation Trends: Lawsuits Under Vermont’s Automatic Renewal Requirements for Consumer Contracts, 9 V.S.A. § 2454a
Last summer, Vermont’s automatic renewal statute—the most stringent of its kind in the nation—went into effect. See 9 V.S.A. § 2454a, available here: https://legislature.vermont.gov/statutes/section/09/063/02454a
Vermont’s automatic renewal law requires that, in addition to accepting the contract, the customer must also take affirmative action to opt into automatic renewal provisions of the contract. Subject only to carve outs for financial institutions and insurance companies, the law governs every contract between a consumer and a seller with an initial term of one year or longer that renews for a subsequent term that is longer than one month. Any such contract may not automatically renew unless the seller satisfies several requirements set forth in the new auto-renewal law. These requirements include, among others, that the terms of the automatic renewal provision be in bold-face type and that the seller provide written notice of the impending auto-renewal to the consumer between 30 and 60 days prior to the renewal.
9 V.S.A. § 2454a is a part of the Vermont Consumer Protection Act (the “CPA”) which provides that a plaintiff may seek damages from the seller, including the amount paid by the consumer, attorneys’ fees and, in some instances, exemplary damages of up to three times the plaintiff’s actual damages. Thus, class actions under the CPA are very attractive to plaintiffs in Vermont.
In the six months since Vermont’s automatic renewal statute went into effect, it has been a significant source of class action litigation that has targeted a broad range of industries. New cases are threatened or filed regularly. In light of the mandatory attorneys’ fees provision and availability of treble damages, we expect to see continued interest in these class actions.
In the meantime, most subscription-based companies are faced with a difficult challenge—seeking to comply with Vermont’s automatic renewal law, as well as federal legislation and state laws in over twenty-five other states.
The lawyers at Gravel & Shea are experienced in defending businesses against suits alleging violations of the Vermont automatic renewal law. We can also provide guidance and counsel to businesses regarding compliance issues.
For more information contact:
Erin M. Moore, Gravel & Shea PC, 802-658-0220 Ext. 217, firstname.lastname@example.org