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The Risks and Rules of Auto-Renewal

Response Magazine

Many direct marketers adopt automatic renewal policies in connection with sales or lease programs for consumer goods or services for personal or household uses. In California, automatic renewal is defined as a plan or arrangement in which a paid subscription or purchasing agreement is automatically renewed at the end of a definite term for a subsequent term.

This practice, of course, is not just a benefit to the direct seller. The customers generally desire and appreciate the convenience of consistent services, benefits, health clubs, music, gaming, privacy services, streaming, and apps, and a seemingly painless and automatic way to pay. It is a practice also beneficial to sellers as it provides a basis of continuous and reliable income and limited reselling costs. So it is good for everyone, right? What can be the harm?

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“The Risks and Rules of Auto-Renewal,” by Jeffrey R. Richter was published in the DRMA Voice, a property of Response Magazine, on October 13, 2015.