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The Federal Trade Commission (FTC) may soon pass new rules that strengthen federal protections for consumers who purchase products or services that are automatically renewed. The FTC rule proposal on automatic renewals would impose strict requirements on companies that offer automatic renewal subscriptions, or negative options, to consumers. Federal statutes and rules typically refer to automatic renewals as “negative options” because the absence of any affirmative action by the customer is enough to justify the auto-renewal.

Federal law on automatic renewals has gotten stronger and more far-reaching in recent years. This has come in response to states like California that have started to take the lead when it comes to protecting consumers against deceptive advertising and business fraud. There are several prominent laws at both the California state level and the federal level that govern retail subscription programs and automatic renewal programs, including the FTC Rule on Automatic Renewals.

Companies that do business in California are legally required to disclose an automatic renewal policy to customers before auto-renewing their subscription. A recent NBC Bay Area News report on the California Automatic Renewal Law (ARL) details how Chegg, an education technology company, has been accused of deceptively renewing subscriptions to a textbook rental service and then making it difficult for customers to cancel the subscriptions.

Tauler Smith LLP filed an ARL claim against textbook company Chegg for allegedly renewing customer subscriptions without notice or authorization. KNTV, which serves as the NBC outlet for the San Francisco Bay Area, reported that the civil lawsuit was filed in federal court on behalf of a student who rented a book for her law school class. It is not uncommon for consumers who make what they thought was a one-time purchase online to later realize that they have been charged again – and again! – for an auto-renewing subscription.

When a customer uses the internet to sign up for a subscription service that automatically renews, there are rules that the subscription company needs to follow in order to comply with both federal and state consumer fraud laws. For example, the California Automatic Renewal Law (ARL) imposes disclosure requirements on businesses. The ARL also requires businesses to make it easy for consumers to cancel their subscriptions.

In a recent on-air report, NBC News spoke to attorney Robert Tauler about California’s Automatic Renewal Law (ARL). The impetus for the story was a lawsuit filed by Los Angeles law firm Tauler Smith LLP on behalf of a consumer who accused a casting company of automatically renewing his subscription to their service without notice or authorization. Many consumers find that it is incredibly difficult to cancel their subscriptions after they sign up for a service or make what they intended to be a one-time purchase online.

California’s Unfair Competition Law (UCL) is one of the most important consumer protection laws in the country. California courts tend to interpret the UCL broadly so that it applies to a wide range of unethical business practices. The statute explicitly prohibits companies from engaging in unlawful, unfair, or fraudulent business actions. It also prohibits companies from using false advertising.

New York’s Automatic Renewal Law (ARL) protects consumers by prohibiting businesses from engaging in certain practices when making an automatic renewal offer in the state. The New York ARL tracks California’s strict statutory requirements, which means that businesses must follow guidelines about disclosing renewal offer terms to consumers, giving customers the opportunity to affirmatively consent before they sign up for an auto-renewal program, and allowing customers to easily cancel their subscription afterwards.

The explosion of the internet and e-commerce has led many businesses to offer their products and services through online subscription services. This has made it easier for consumers to quickly make purchases from their phone or computer, and it has also made it easier for companies to lock customers into subscriptions that renew automatically. These auto-renewal plans become problematic when companies use them to take advantage of customers who might not realize what they are signing up for.

High-end department store Macy’s faces a lawsuit for its Beauty Box automatic subscription service. The company has been accused of violating consumer protection laws by using deceptive practices to enroll customers in an auto-renewal program for one of its popular beauty product services. Law firm Tauler Smith LLP believes that many people have probably fallen victim to Macy’s allegedly unlawful subscription practices.