📋 What is Auto-Renewal Fraud?
Auto-renewal fraud occurs when businesses trap consumers in recurring subscriptions through deceptive practices, hidden terms, or impossible cancellation processes. California has some of the strongest consumer protection laws in the nation against these abusive tactics through the Automatic Renewal Law (ARL) codified at Business & Professions Code Sections 17600-17606.
When to Use This Guide
Use this guide if a business has:
💳 Charged Without Consent
Auto-renewed your subscription without clear disclosure or your affirmative agreement
🚫 Made Cancellation Impossible
Required phone calls, in-person visits, or hidden steps to cancel online subscriptions
📨 Failed to Notify
Did not send required 30-day notice before annual renewal or price increase
💰 Charged After Cancellation
Continued billing after you cancelled or attempted to cancel
Common Auto-Renewal Traps
🎁 Free Trial Conversions
▼The classic subscription trap: sign up for a "free trial" that silently converts to a paid subscription. Common violations include:
- No clear disclosure that trial will auto-convert to paid
- Pre-checked boxes for recurring billing
- Renewal terms buried in lengthy terms of service
- No email confirmation of auto-renewal terms
- First notice is a charge on your credit card statement
💪 Gym Membership Traps
▼Gyms and fitness studios are notorious for auto-renewal abuse. Common tactics include:
- Requiring certified mail or in-person cancellation
- 30-60 day "notice periods" that result in extra charges
- Annual contracts that auto-renew without notification
- Continuing to charge after verbal or email cancellation
- Sales staff that obscures renewal terms during sign-up
💻 Software/SaaS Renewals
▼Software companies often lock users into annual subscriptions that silently renew:
- Annual plans that auto-renew without 30-day notice
- No online cancellation option despite online signup
- Price increases applied at renewal without disclosure
- Data held "hostage" if you don't renew
- Cancellation requires contacting sales team during business hours
📦 Subscription Box Services
▼Meal kits, beauty boxes, and other subscription services frequently violate ARL:
- Shipping products after cancellation request
- Requiring phone calls to cancel online subscriptions
- "Skip" options that don't actually pause billing
- Hidden "restocking fees" for cancelled boxes
- Aggressive retention tactics when attempting to cancel
📚 Hidden Terms Violations
▼Many businesses bury auto-renewal terms in ways that violate California law:
- Auto-renewal disclosure only in hyperlinked Terms of Service
- Small, light-colored text that blends with background
- Disclosure after the "Purchase" button
- No separate acknowledgment of recurring charges
- Misleading pricing (e.g., "$9.99/month" when billed annually)
👍 California's Strong Consumer Protections
- ARL (Bus. & Prof. Code 17600-17606) - Specific requirements for auto-renewal disclosures and cancellation
- CLRA overlap - Auto-renewal violations often trigger Consumer Legal Remedies Act claims
- Easy cancellation required - Online subscriptions must be cancellable online
- Full refund remedy - ARL violations can void the entire contract
⚠ Statute of Limitations
In California, you generally have 4 years for breach of contract and CLRA claims, and 3 years for fraud claims. For credit card disputes, you must dispute within 60 days of the statement date under the Fair Credit Billing Act. Act quickly to preserve all your remedies.
⚖ Legal Basis
California provides robust legal protections against auto-renewal fraud through multiple overlapping statutes. Understanding these laws strengthens your demand.
California Automatic Renewal Law (ARL)
Bus. & Prof. Code Section 17602 - Disclosure Requirements
Before charging a consumer, businesses must present auto-renewal terms in a clear and conspicuous manner, including: (1) that the subscription will continue until cancelled; (2) the cancellation policy; (3) the recurring charge amount; and (4) the minimum purchase obligation. Terms cannot be buried in general Terms of Service.
Bus. & Prof. Code Section 17602(a)(1) - Affirmative Consent
The business must obtain the consumer's affirmative consent to the auto-renewal terms before charging. Pre-checked boxes are not sufficient. The consumer must actively agree to the recurring charges through an unchecked checkbox, signature, or explicit click.
Bus. & Prof. Code Section 17602(a)(2) - Written Acknowledgment
After obtaining consent, the business must provide a written acknowledgment (email acceptable) that includes the auto-renewal terms, cancellation policy, and information on how to cancel. This must be sent before the subscription begins or immediately after signup.
Bus. & Prof. Code Section 17602(e) - 30-Day Renewal Notice
For subscriptions with terms of one year or longer, the business must send a reminder notice 15-45 days before renewal. This notice must explain how to cancel and include a working cancellation mechanism. Failure to send this notice is a per se ARL violation.
Bus. & Prof. Code Section 17602(c) - Easy Cancellation
If the consumer signed up online, the business must provide an online cancellation mechanism. Cancellation must be at least as easy as signup. Requiring phone calls, certified mail, or in-person visits for online subscriptions violates California law.
CLRA Overlap (Civil Code 1770)
Auto-renewal violations often also violate the California Consumer Legal Remedies Act:
- Section 1770(a)(5) - Misrepresenting goods/services have characteristics they do not have
- Section 1770(a)(9) - Advertising goods with intent not to sell as advertised
- Section 1770(a)(14) - Misrepresenting consumer's rights or remedies
- Section 1770(a)(19) - Inserting unconscionable contract provisions
💡 30-Day CLRA Notice Required
Before filing a CLRA lawsuit for damages, you must send the defendant a written demand at least 30 days before filing. This pre-suit notice must identify the specific practices violated and your actual damages. The demand letter templates in this guide satisfy this requirement.
Key ARL Violation Remedies
💰 Bus. & Prof. Code Section 17603 - Goods Deemed Gift
If a business violates any ARL disclosure requirement, any goods or services provided are considered an unconditional gift to the consumer. This means you are entitled to a full refund of all charges while keeping any goods/services received. This is a powerful remedy unique to California.
💰 Damages
California law provides multiple avenues for recovery in auto-renewal fraud cases. Your damages depend on which laws were violated and whether the conduct was willful.
| Remedy | Description |
|---|---|
| Full Refund (ARL) | All charges paid under non-compliant auto-renewal - goods/services deemed unconditional gift |
| Actual Damages (CLRA) | Out-of-pocket losses, including unauthorized charges and consequential damages |
| Restitution | Return of all money paid under the unlawful subscription |
| Punitive Damages | Additional damages if company acted with fraud, oppression, or malice (potential 2-5x actual) |
| Civil Penalties | Up to $2,500 per violation for pattern violations (primarily AG/DA enforcement) |
| Attorney Fees | CLRA provides one-way fee-shifting - you recover fees if you win; defendant doesn't if they win |
| Injunctive Relief | Court order requiring company to fix cancellation process and disclosure practices |
📊 Sample Damages Calculation
Example: Hidden Gym Membership Auto-Renewal
Note: Does not include potential punitive damages, attorney fees, or civil penalties. With attorney involvement, recovery often 3-5x higher.
⚠ Why Companies Settle
The CLRA's one-way attorney fee provision creates massive settlement pressure. A $500 subscription dispute can generate $20,000+ in attorney fees if litigated. Companies often settle quickly to avoid this exposure, especially when you cite specific ARL and CLRA violations.
✅ Evidence Checklist
Gather these documents before sending your demand letter. Strong evidence is crucial for auto-renewal fraud claims. Click to check off items as you collect them.
📝 Original Signup Terms
- ✓ Screenshots of checkout/signup page
- ✓ Email confirmation of subscription
- ✓ Terms of service at time of signup (use Wayback Machine)
- ✓ Original receipt or invoice
- ✓ Signed contract (if physical signup)
🔔 Renewal Notices (or Lack Thereof)
- ✓ Search email for any renewal reminders
- ✓ Check spam folder for missed notices
- ✓ Screenshot email search showing NO renewal notice
- ✓ If notice received, check if sent 15-45 days before renewal
💳 Bank/Credit Card Statements
- ✓ All statements showing recurring charges
- ✓ Highlight each charge from the company
- ✓ Note any price increases between charges
- ✓ Calculate total amount paid
- ✓ Document any overdraft/NSF fees caused by charges
🚫 Cancellation Attempts
- ✓ Emails requesting cancellation
- ✓ Chat transcripts with customer service
- ✓ Phone call log (date, time, duration, rep name)
- ✓ Screenshots showing no cancel button in account
- ✓ Any cancellation confirmation (if received)
💡 Use the Wayback Machine
If the company has changed their website since you signed up, use archive.org/web to find snapshots of their old checkout page and terms. This can prove what disclosures were (or weren't) present when you subscribed.
⚠ Pattern Evidence Strengthens Your Case
Search for other consumers with similar complaints. Check BBB complaints, Trustpilot, Yelp, Reddit, and classaction.org. Document evidence of widespread violations - this supports claims of willful/knowing conduct and potential class action.
📝 Sample Language
Copy and customize these paragraphs for your demand letter. Each addresses a specific type of ARL/CLRA violation.
📄 Full Sample Demand Letter
Use this complete template for your demand letter. Replace all [BRACKETED] placeholders with your specific information. Send via certified mail, return receipt requested.
[YOUR NAME]
[YOUR ADDRESS]
[CITY, STATE ZIP]
[YOUR EMAIL]
[YOUR PHONE]
[DATE]
VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
Tracking No.: _______________
[COMPANY NAME]
Attn: Legal Department
[COMPANY ADDRESS]
[CITY, STATE ZIP]
Re: CLRA 30-Day Pre-Suit Demand - Violations of California Automatic Renewal Law and Consumer Legal Remedies Act
Dear [COMPANY NAME]:
This letter constitutes formal notice under California Civil Code Section 1782 of violations of the Consumers Legal Remedies Act and California's Automatic Renewal Law (Bus. & Prof. Code Sections 17600-17606) arising from your unlawful subscription practices.
I. SUBSCRIPTION DETAILS
- Subscription/Service: [SUBSCRIPTION SERVICE NAME]
- Original signup date: [ORIGINAL SIGNUP DATE]
- Advertised/expected price: [ORIGINAL PRICE OR "FREE TRIAL"]
- Account email/ID: [YOUR ACCOUNT EMAIL OR ID]
- Last 4 digits of payment method: [XXXX]
II. UNAUTHORIZED/UNWANTED CHARGES
The following charges were made without proper disclosure, consent, or after my cancellation request:
- [CHARGE DATE 1]: $[AMOUNT]
- [CHARGE DATE 2]: $[AMOUNT]
- [CHARGE DATE 3]: $[AMOUNT]
- [ADD MORE AS NEEDED]
Total unauthorized charges: $[TOTAL AMOUNT]
III. CALIFORNIA AUTOMATIC RENEWAL LAW VIOLATIONS
Your company has violated the California Automatic Renewal Law in the following ways:
A. Failure to Clearly Disclose Auto-Renewal Terms (Section 17602(a))
[DESCRIBE: e.g., "Your checkout page did not clearly and conspicuously disclose that the subscription would auto-renew. The only mention of recurring charges was buried in a hyperlinked Terms of Service document, in small text that did not stand out from surrounding content."]
B. Failure to Obtain Affirmative Consent (Section 17602(a)(1))
[DESCRIBE: e.g., "Your signup process did not obtain my affirmative consent to recurring charges. There was no unchecked checkbox for auto-renewal, and the 'Subscribe' button did not clearly indicate I was agreeing to recurring payments."]
C. Failure to Provide Written Acknowledgment (Section 17602(a)(2))
[DESCRIBE: e.g., "I did not receive a confirmation email that clearly stated the auto-renewal terms, cancellation policy, and how to cancel."]
D. Failure to Provide Pre-Renewal Notice (Section 17602(e))
[DESCRIBE: e.g., "For my annual subscription, you did not send the required renewal reminder 15-45 days before the renewal date. I searched my email inbox and spam folder and found no such notice."]
E. Failure to Provide Easy Cancellation (Section 17602(c))
[DESCRIBE: e.g., "I subscribed entirely online but your website provides no online cancellation option. When I attempted to cancel, I was directed to call a phone number during limited business hours, which violates the requirement that online subscriptions be cancellable online."]
IV. CLRA VIOLATIONS (Civil Code Section 1770)
Your conduct also violates the California Consumer Legal Remedies Act:
- Section 1770(a)(5): Misrepresenting that the service had characteristics it does not have (specifically, an easy cancellation process)
- Section 1770(a)(14): Misrepresenting consumer's rights and remedies ("cancel anytime" advertising while making cancellation effectively impossible)
- Section 1770(a)(19): Inserting unconscionable provisions (auto-renewal terms hidden in fine print, impossible cancellation requirements)
V. MY CANCELLATION ATTEMPTS
I attempted to cancel my subscription on the following occasions:
- [DATE]: [METHOD - e.g., "Sent email to support@company.com"] - [RESULT - e.g., "No response received"]
- [DATE]: [METHOD] - [RESULT]
- [DATE]: [METHOD] - [RESULT]
VI. DEMAND
Pursuant to Civil Code Section 1782 and Business & Professions Code Section 17603, I demand the following remedy within 30 days of your receipt of this notice:
- Full refund of $[TOTAL AMOUNT] representing all unauthorized charges
- Immediate cancellation of my subscription with written confirmation
- Removal of my payment method from your system to prevent further charges
- Written confirmation that no amounts are owed and no collections activity will occur
VII. CONSEQUENCES OF FAILURE TO CURE
This letter serves as the mandatory 30-day pre-suit notice required by Civil Code Section 1782. If you fail to provide an appropriate remedy within 30 days of receipt, I will pursue all available legal remedies, including:
- Civil action under CLRA for actual damages, restitution, and punitive damages (Civil Code Section 1780)
- Claims under California Unfair Competition Law (Bus. & Prof. Code Section 17200)
- Recovery of attorney fees and costs (CLRA Section 1780(e) mandates fee-shifting to prevailing plaintiff)
- Injunctive relief to prevent continued violations
- Complaint to California Attorney General and Federal Trade Commission
- Credit card dispute under Fair Credit Billing Act
Given the CLRA's one-way attorney fee provision, your litigation exposure will far exceed the amount in dispute. I strongly encourage you to resolve this matter promptly.
VIII. RESERVATION OF RIGHTS
Nothing in this letter waives any legal claims, defenses, or remedies. This notice is provided solely to comply with Civil Code Section 1782 pre-suit requirements. I reserve all rights to pursue additional claims under state and federal law.
Please contact me at [YOUR EMAIL] or [YOUR PHONE] within 30 days to arrange refund and confirm cancellation.
Sincerely,
________________________________
[YOUR SIGNATURE]
[YOUR TYPED NAME]
Enclosures:
- Credit card/bank statements showing charges
- Screenshots of signup page/checkout process
- Copies of cancellation attempt emails
- Screenshots showing lack of online cancellation option
- Email search showing no renewal notice received
cc: California Attorney General Consumer Protection Division
cc: Federal Trade Commission (ftc.gov/complaint)
🚀 Next Steps
What to do after sending your demand letter.
Expected Timeline
Days 1-7
Company receives letter, logs complaint, routes to legal/compliance department
Days 7-21
Investigation period - they review your account, verify claims, assess liability
Days 21-30
Response due - settlement offer, refund, or denial with reasoning
Day 30+
CLRA waiting period expires - you can now file lawsuit for damages + attorney fees
While Waiting
-
File a Credit Card Dispute
Contact your credit card issuer and dispute the charges as "cancelled recurring transaction" or "services not as described." You have 60 days from the statement date under the Fair Credit Billing Act. This creates additional pressure and may result in immediate chargeback.
-
Block Future Charges
Contact your bank/card issuer to block future charges from the merchant. You can also get a new card number to prevent unauthorized billing.
-
Document Everything
Save all responses from the company. If they call, take notes (date, time, rep name, what was said). If they email, save copies.
If They Don't Respond or Refuse
-
Consult a Consumer Rights Attorney
Many work on contingency or limited-scope representation for demand letters. The CLRA's fee-shifting provision makes these cases economical for attorneys even when amounts are modest.
-
File Regulatory Complaints
Report violations to: California Attorney General (oag.ca.gov), FTC (ftc.gov/complaint), Better Business Bureau, and your local District Attorney's consumer protection unit.
-
Small Claims Court
For claims under $12,500, California small claims court is fast, cheap ($30-75 filing fee), and doesn't require an attorney. You can sue for your refund plus consequential damages.
-
Check for Class Actions
Search for existing class actions against the company. If your situation is common, joining a class may be easier than individual litigation.
-
File a Superior Court Lawsuit
After 30-day CLRA notice period, file in Superior Court for CLRA, ARL, UCL, and breach of contract claims. With attorney fee recovery, this becomes economically viable even for modest claims.
Need Legal Help?
Auto-renewal fraud cases can be complex, but the attorney fee provisions make them viable. Get a 30-minute strategy call to evaluate your case and discuss next steps.
Book Consultation - $125California Resources
- California Attorney General Consumer Protection: oag.ca.gov/consumers
- Federal Trade Commission: ftc.gov/complaint
- California Courts Self-Help: courts.ca.gov/selfhelp
- State Bar Lawyer Referral: calbar.ca.gov
- Wayback Machine (for old website versions): archive.org/web
⚠ Don't Wait Too Long
The statute of limitations for CLRA claims is 3 years and for breach of contract is 4 years. Credit card disputes must be filed within 60 days of the statement date. Evidence disappears, and companies may change their practices. Take action promptly to protect your rights.
📖 Related Articles
Explore more California consumer protection resources on our blog.