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§7.01 Unsolicited Goods and Advertising—Goods and Services

 
Lesson 7:
Consumer
Protection
& Warranties

Goods or services must not be provided unless they have been ordered, except merchandise that is provided pursuant to an agreed plan under which the consumer has the burden to inform the seller not to ship or other standing order arrangements. [CC §1584.5(a)–(b).] Unsolicited goods and services includes those mailed to the consumer unless he or she rejects the offer or receipt on approval. [CC §1584.5.]

All goods or services received that have not been ordered become an unconditional gift to the recipient. Similar rules apply to retail membership organizations that continue to send goods after receiving notice from the consumer terminating his or her membership. If the sender continues to send bills or requests for payment, the recipient may sue for an injunction. [CC §§1584.5–1584.6.]

Automatic Purchase Renewals. Effective December 1, 2010 [B&PC §17606], any business making an automatic renewal or continuous service offer (defined in B&PC §17601) to a California consumer must:

  • Present the automatic renewal or continuous service offer terms in a clear and conspicuous manner,
  • Obtain the consumer’s affirmative consent before charging for an automatic renewal or continuous service,
  • Provide an acknowledgment that includes the automatic renewal or continuous service offer terms, cancellation policy, and information regarding how to cancel in a manner that is capable of being retained by the consumer [B&PC §17602(a)], and
  • Provide the consumer with a clear and conspicuous notice of any material change and information regarding how to cancel [B&PC §17602(c)].

If a business sends any goods, wares, merchandise, or products to a consumer under a continuous service agreement or automatic renewal of a purchase, without first obtaining the consumer's affirmative consent, the goods, wares, merchandise, or products are for all purposes deemed to be an unconditional gift. [B&PC §17603.] These requirements reflect a legislative goal of ending the practice of ongoing charging of consumer credit or debit cards or third-party payment accounts without the consumers' explicit consent for ongoing shipments of a product or deliveries of service. [B&PC §17600.]

Businesses listed in B&PC §17605 are exempt from the automatic renewal and continuous service offer requirements. A business may assert good faith compliance with the requirements. [B&PC §17604(b).]

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