Senate Bill 796 was recently filed for consideration by the Michigan Legislature. This bill, which is similar to one filed last year, proposes to amend Michigan’s Consumer Protection Act by prohibiting, under certain circumstances, an automatic renewal provision within a consumer agreement. Michigan’s Consumer Protection Act is part of the state’s Trade and Commerce law and is enforced by the Attorney General. This law addresses, among other things, unfair and deceptive practices in the area of trade and commerce and deems them to be prohibited.
SB 796 proposes to add to the list of prohibited practices the enforcement of, or the attempt to enforce, an agreement that provide services to a consumer which contains an automatic renewal provision, unless the consumer signs an acknowledgement of such a provision before entering into the agreement and at least 30 days before the end of the term of an agreement, a notice is sent to the consumer that indicates that the agreement will automatically be renewed unless the consumer terminates the agreement. The legislation provides that such notice may be sent electronically to the last known electronic mail address of the consumer, or by certified mail, to the last known address of the consumer. Neither current law, nor this legislation, define “agreement”. However, current law defines “trade and commerce” as “the conduct of a business providing goods, property, or service primarily for personal, family, or household purposes and includes the advertising, solicitation, offering for sale or rent, sale, lease, or distribution of a service or property, tangible or intangible, real, personal, or mixed, or any other article, or a business opportunity.”
Although not specifically addressed in this legislation, it is worth noting that Michigan’s Consumer Protection Act currently addresses companies engaged in trade or commerce by providing service contracts to consumers, and requires that a service contract for the repair or maintenance of a home appliance must contain a provision that states that if performance of the service contract is interrupted because of a strike or work stoppage at the company’s place of business, the effective period of the service contract shall be extended for the period of the strike or work stoppage.
