California SaaS Unauthorized Charges & Billing Disputes

Auto-Renewal Law (Bus. & Prof. Code 17600-17606) | CLRA | Hidden Fees | Price Increases Without Notice

California Law for SaaS Billing Disputes
Core Legal Framework: California provides robust protections against unauthorized SaaS charges through multiple statutes: the Automatic Renewal Law (Bus. & Prof. Code 17600-17606), the Consumer Legal Remedies Act (Civil Code 1750-1785), and the Unfair Competition Law (Bus. & Prof. Code 17200). These laws require clear disclosures, easy cancellation, and prohibit deceptive billing practices.
California Automatic Renewal Law (ARL)

The California Automatic Renewal Law (Business & Professions Code Sections 17600-17606) is one of the strongest subscription protection laws in the nation:

Requirement What the Law Mandates
Clear Disclosure (17602(a)(1)) Automatic renewal terms must be presented clearly and conspicuously before the consumer consents to the subscription
Affirmative Consent (17602(a)(2)) Business must obtain affirmative consent to the automatic renewal agreement separately from other terms
Acknowledgment (17602(a)(3)) Business must provide acknowledgment in a manner that can be retained by the consumer (email, printable confirmation)
Easy Cancellation (17602(a)(3)) Must provide toll-free number, email address, or other cost-effective mechanism for cancellation
Online Cancellation (17602(a)(3)(C)) If enrolled online, must allow cancellation through the same website or app
Pre-Renewal Notice (17602(b)) For free trial to paid, or material change in terms, must send reminder notice before renewal
Violation Consequence: If a SaaS company fails to comply with the ARL, the automatic renewal provision is UNENFORCEABLE, and the consumer is entitled to a full refund of all charges made under the non-compliant agreement. This is automatic - no proof of harm required.
Consumer Legal Remedies Act (CLRA)

The CLRA (Civil Code Sections 1750-1785) provides additional protections against deceptive SaaS billing:

  • Section 1770(a)(9): Prohibits advertising goods or services with intent not to sell them as advertised (applies to bait-and-switch pricing)
  • Section 1770(a)(13): Prohibits making false statements about reasons for, existence of, or amounts of price reductions
  • Section 1770(a)(14): Prohibits representing that a transaction involves rights or obligations that it does not
  • Section 1770(a)(19): Prohibits inserting unconscionable provisions in contracts
30-Day Notice Required: Before suing for CLRA damages, you must send a written demand letter via certified mail giving the company 30 days to cure the violation. This notice is mandatory for damages claims but not required for injunctive relief.
Unfair Competition Law (UCL)

California's UCL (Business & Professions Code Section 17200) broadly prohibits:

  • Unlawful: Any practice that violates another law (including ARL and CLRA)
  • Unfair: Practices that harm consumers without legitimate business justification
  • Fraudulent: Practices likely to deceive reasonable consumers
UCL Advantage: The UCL does not require the 30-day notice required by the CLRA. You can pursue restitution immediately. However, it does not provide punitive damages or attorney fees like the CLRA.
Federal Credit Card Protections

In addition to California law, federal regulations provide chargeback rights:

Protection Time Limit Application
Fair Credit Billing Act 60 days from statement Billing errors, unauthorized charges
EFTA (Debit Cards) 60 days from statement Unauthorized electronic transfers
Visa/MC Zero Liability Varies by card Fraud protection policies
Strategy: Always dispute unauthorized charges with your credit card company while simultaneously pursuing your statutory rights. The chargeback process is faster, but California law provides broader remedies including full refunds of non-compliant subscriptions.
Common SaaS Billing Violations
1. Hidden Fees and Undisclosed Charges
Most Common Violation: SaaS companies add fees that were not clearly disclosed at signup. This includes platform fees, processing fees, overage charges, and "premium support" fees that materialize after purchase.
  • Setup fees not disclosed until after signup
  • Platform fees added to advertised price
  • Transaction fees hidden in terms of service
  • Overage charges without clear threshold warnings
  • Premium support fees bundled without consent
  • "Maintenance" or "infrastructure" fees added post-purchase
Legal Standard: Under the ARL, all material terms including the full price must be presented "clearly and conspicuously" BEFORE the consumer agrees. Hidden fees in the terms of service do not satisfy this requirement.
2. Price Increases Without Proper Notice
  • Stealth price increases: Raising prices without any notice
  • Buried email notices: Price change hidden in marketing emails
  • Immediate implementation: No opportunity to cancel before increase
  • "Grandfathering" bait: Promising locked-in rates, then increasing
  • Feature removal with same price: Reducing value without consent
ARL Requirement: For any "material change" in terms (including price increases), the business must provide clear notice BEFORE the renewal date and give the consumer an opportunity to cancel. Failure to do so makes the renewal unenforceable.
3. Charges After Cancellation
  • Continued billing: Charges continue after cancellation request
  • Cancellation ignored: Company claims it never received cancellation
  • Difficult cancellation process: Required to call, mail letter, or wait on hold
  • "Retention" tricks: Cancellation routed to sales team who refuse to process
  • Automatic reactivation: Service reactivates without consent
  • Prorated refusal: Company refuses to refund unused portion
ARL Requirement: If you signed up online, the company MUST allow you to cancel through the same website or app. They cannot require you to call or mail a letter. Any charge made after a proper cancellation request is unauthorized and must be refunded.
4. Free Trial to Paid Conversion Traps
  • No reminder notice: Trial converts to paid without warning
  • Hidden credit card requirement: Card charged automatically at trial end
  • Shortened trial: Trial ends earlier than stated
  • Full-price conversion: Trial converts at higher rate than advertised
  • Difficult trial cancellation: Cannot cancel trial without calling
ARL Protection: For free trials that convert to paid subscriptions, the company MUST send a reminder notice before charging you. If they fail to send this notice, the charges are unenforceable and you are entitled to a full refund.
5. Annual Plan Traps
  • Forced annual renewal: Annual plan auto-renews without notice
  • No pro-rata refund: Cannot cancel annual plan mid-term
  • Price increase on renewal: Annual rate jumps significantly
  • Downgrade restrictions: Cannot switch to monthly without losing data
  • Early termination fees: Hidden penalties for cancellation
6. Enterprise/Business Plan Abuses
  • Seat count manipulation: Charging for inactive or removed users
  • Usage-based billing errors: Overstated API calls or storage
  • Scope creep charges: Fees for features promised as included
  • Support tier changes: Reducing support level without notice
  • Data hostage tactics: Charging for data export
Violation Type Primary Law Violated Remedy
Hidden fees not disclosed ARL 17602(a)(1), CLRA 1770(a)(14) Full refund of all subscription charges
Price increase without notice ARL 17602(b), CLRA 1770(a)(13) Refund of increased amount
Charges after cancellation ARL 17602(a)(3), UCL 17200 Full refund + restitution
No online cancellation option ARL 17602(a)(3)(C) All renewal charges unenforceable
Free trial conversion without notice ARL 17602(b) Full refund of all charges
Writing Your SaaS Billing Dispute Letter
Step 1: Gather Your Documentation

Before writing your demand letter, compile all relevant evidence:

  • Signup confirmation: Original order email, receipt, or welcome message
  • Pricing screenshots: Screenshots of advertised pricing at signup
  • Terms of service: The terms in effect when you signed up (use Wayback Machine if needed)
  • Billing statements: All invoices and credit card statements showing charges
  • Communications: All emails, chat logs, and support tickets with the company
  • Cancellation proof: Screenshots, emails, or confirmations of cancellation attempts
  • Change notices: Any price change or terms change notifications received (or not received)
Step 2: Identify the Specific Violations
If the SaaS Company Did This... Cite This Law
Failed to clearly disclose auto-renewal terms Bus. & Prof. Code 17602(a)(1)
Did not get affirmative consent to auto-renewal Bus. & Prof. Code 17602(a)(2)
No cancellation mechanism online Bus. & Prof. Code 17602(a)(3)(C)
No reminder before free trial conversion Bus. & Prof. Code 17602(b)
Hidden fees not disclosed at signup CLRA 1770(a)(14), (a)(9)
Price increase without clear notice CLRA 1770(a)(13), ARL 17602(b)
Continued charges after cancellation UCL 17200, CLRA 1770(a)(14)
Step 3: Calculate Your Demand
  • Unauthorized charges: List every charge you dispute with dates and amounts
  • Total refund demanded: Sum of all unauthorized or unlawful charges
  • Interest: 10% per annum under Civil Code 3289 from date of each charge
  • Bank fees: Any overdraft or returned payment fees caused by unauthorized charges
ARL Automatic Refund: If the company violated the Automatic Renewal Law, you are entitled to a FULL REFUND of all charges made under the non-compliant subscription agreement - not just the disputed charges.
Step 4: Required Letter Components
Component What to Include
Header Your name, address, email; date; company's legal name and address
Subject Line "DEMAND FOR REFUND - UNAUTHORIZED CHARGES" or "CLRA 30-DAY NOTICE"
Account Info Your account email, customer ID, subscription details
Factual Background When you signed up, what was represented, what happened
Legal Violations Specific citations to ARL, CLRA, and/or UCL provisions
Charges Disputed List each unauthorized charge with date and amount
Demand Specific refund amount and deadline (30 days for CLRA)
Consequences Litigation warning, chargeback filing, regulatory complaints
Step 5: Sending Your Letter
  • Email to billing/legal: Send to billing support AND legal department if addresses are known
  • Certified mail: Required for CLRA 30-day notice; send to registered agent or HQ
  • Document delivery: Keep copies and proof of sending
  • File chargeback simultaneously: Do not wait for response - file with credit card company
Finding Legal Address: For corporations, search the California Secretary of State's business database at bizfileonline.sos.ca.gov for the registered agent. For out-of-state companies doing business in California, they must have a California agent for service of process.
Step 6: Parallel Actions to Take
  • Credit card chargeback: Dispute charges with your bank (60-day limit from statement)
  • California Attorney General: File complaint at oag.ca.gov/contact/consumer-complaint-against-business-or-company
  • FTC complaint: File at reportfraud.ftc.gov
  • BBB complaint: While not legally binding, can prompt response
  • Social media: Public complaints often get faster responses (be factual, not defamatory)
Create Your Demand Letter
Interactive Generator: Fill in the form below and watch your letter update in real-time. Click on any highlighted text in the preview to edit it directly. All California-specific legal citations are automatically included.
Your Information
SaaS Vendor Information
Charge Details
If you canceled
Type of Violation
Prior Communications
Live Preview
After generating your letter:
  • Review all highlighted fields and ensure accuracy
  • Attach copies of billing statements and original signup terms
  • Send via Certified Mail, Return Receipt Requested
  • Also send via email to billing/legal department
  • File a chargeback with your credit card company simultaneously
Remedies and Enforcement Options
Automatic Renewal Law Remedies
Automatic Refund Right: Under Business & Professions Code Section 17603, if a SaaS company fails to comply with ANY of the ARL requirements (disclosure, consent, acknowledgment, or cancellation), the automatic renewal provision is UNENFORCEABLE. This means you are entitled to a full refund of all charges made under that subscription.
ARL Violation Remedy
Failed to clearly disclose auto-renewal terms Full refund of all subscription charges
No affirmative consent obtained Full refund of all subscription charges
No acknowledgment provided Full refund of all subscription charges
No online cancellation mechanism Full refund of all renewal charges
No pre-renewal notice (free trial or material change) Refund of charges after conversion/change
CLRA Remedies

Under the Consumer Legal Remedies Act, you can recover:

  • Actual damages: All amounts improperly charged
  • Punitive damages: If the violation was "willful" (intentional or reckless)
  • Attorney fees: Mandatory for prevailing consumers (Civil Code 1780(e))
  • Injunctive relief: Court order to stop the illegal practice
  • Restitution: Return of all money obtained through the violation
30-Day Notice Required: You must send the CLRA notice and wait 30 days before filing a lawsuit for damages. If the company offers an "appropriate" remedy within 30 days, your damages may be limited. However, you can file for injunctive relief immediately without waiting.
Credit Card Chargebacks

File chargebacks with your credit card issuer:

Card Type Time Limit Dispute Reason
Visa/Mastercard 120 days from transaction Services not provided, unauthorized transaction, cancellation not honored
American Express 120 days Same as above
Discover 120 days Same as above
Debit Card (EFTA) 60 days from statement Unauthorized electronic transfer
Chargeback Strategy: File chargebacks for each unauthorized transaction. Use reason codes like "Cancelled Recurring Transaction" (Visa 41, MC 4841) or "Services Not Provided" (Visa 30, MC 4855). Provide your cancellation documentation and demand letter as evidence.
Small Claims Court

For amounts up to $12,500, California Small Claims Court is an excellent option:

  • Filing fee: $30-$100 depending on amount
  • No attorney needed: You represent yourself
  • Fast resolution: Typically 30-70 days to hearing
  • Can recover: All unauthorized charges plus filing costs
Regulatory Complaints

File complaints with these agencies:

  • California Attorney General: oag.ca.gov - enforces ARL and CLRA
  • Federal Trade Commission: reportfraud.ftc.gov - deceptive practices
  • Consumer Financial Protection Bureau: consumerfinance.gov - billing disputes
  • Better Business Bureau: bbb.org - can facilitate resolution
Class Action Potential
Widespread Violations: If the SaaS company is using the same non-compliant practices with all customers, your case may have class action potential. Both the CLRA and UCL expressly authorize class actions. Contact a consumer protection attorney if you believe many others are affected.
Statute of Limitations
Claim Type Time Limit Legal Authority
CLRA 3 years Civil Code 1783
UCL 4 years Bus. & Prof. Code 17208
Breach of Contract 4 years (written), 2 years (oral) CCP 337, 339
Credit Card Chargeback 60-120 days FCBA/Card Network Rules
Attorney Services
Fighting SaaS Billing Abuse?

I help California consumers recover unauthorized SaaS charges and fight deceptive billing practices. From demand letters to litigation, I can help you enforce your rights under the Automatic Renewal Law, CLRA, and UCL.

How I Can Help
  • Demand Letter Drafting: Professional letters citing all applicable California statutes
  • Case Evaluation: Review your subscription agreement and identify all legal violations
  • Chargeback Support: Prepare documentation for credit card disputes
  • Regulatory Complaints: Draft and file complaints with California AG and FTC
  • Litigation: File lawsuits under CLRA, ARL, and UCL
  • Class Actions: Evaluate and pursue class claims for widespread violations
Types of Cases I Handle
  • SaaS subscriptions that continue charging after cancellation
  • Hidden fees and undisclosed charges
  • Price increases without proper notice
  • Free trial conversions without reminder notices
  • Subscriptions with no online cancellation option
  • Auto-renewals without affirmative consent
  • Data hostage situations (charging for data export)
  • Enterprise software billing disputes
When to Consult an Attorney
Consider consulting an attorney if:
  • The total unauthorized charges exceed $5,000
  • The company has refused to issue a refund after your demand
  • You believe many other customers are affected (class action potential)
  • The company has threatened collections or credit reporting
  • You need to enforce a judgment
  • The company is based outside the US but doing business in California
Schedule a Consultation

Book a call to discuss your SaaS billing dispute. I will review your situation, identify all legal violations, and recommend the most effective strategy to recover your money.

Contact Information

Email: owner@terms.law

Frequently Asked Questions
No. Once you submit a valid cancellation request, no further charges should be made. Under California's Automatic Renewal Law (Bus. & Prof. Code 17602(a)(3)), if you enrolled online, the company MUST allow you to cancel through the same website or app. Any charge made after a valid cancellation request is unauthorized and you are entitled to a full refund. Document your cancellation (screenshots, confirmation emails) and dispute any subsequent charges.
Under the California Automatic Renewal Law, burying material terms in a lengthy terms of service is NOT sufficient. The law requires that automatic renewal terms and all material charges be presented "clearly and conspicuously" BEFORE you agree to the subscription. A hyperlink to terms that are not prominently displayed does not satisfy this requirement. If fees were not clearly disclosed at signup, you are entitled to a refund regardless of what the ToS says.
Yes. Even if you initially agreed to a subscription, you can dispute charges if: (1) the company failed to comply with California's Automatic Renewal Law requirements, (2) charges continued after you canceled, (3) the company made undisclosed price increases, (4) hidden fees were not clearly disclosed at signup, or (5) a free trial converted to paid without proper notice. The ARL makes the entire subscription unenforceable if these requirements are violated.
There are multiple time limits depending on the remedy: Credit card chargebacks typically must be filed within 60-120 days of the transaction. CLRA claims have a 3-year statute of limitations. UCL claims have 4 years. For fastest results, file a chargeback immediately while also sending a demand letter. Even if the chargeback window has passed, you may still have valid legal claims under California consumer protection statutes.
Yes. California's Automatic Renewal Law and consumer protection statutes apply to any company that does business with California consumers, regardless of where the company is headquartered. If you are a California resident and the company sold you a subscription, California law applies to that transaction. Many large SaaS companies have California registered agents precisely because they must comply with California law when serving California customers.
Yes, under the CLRA. Civil Code Section 1780(e) provides that a prevailing consumer plaintiff SHALL recover attorney fees and costs. This makes it economical to pursue even smaller claims with an attorney, as the company will be responsible for your legal fees if you win. This is why many SaaS companies settle valid claims rather than face litigation where they would also pay your attorney.

Related Resources

Explore additional California demand letter guides and legal resources:

Stop Unauthorized SaaS Charges

California law provides powerful protections against deceptive SaaS billing practices. Whether you are dealing with hidden fees, charges after cancellation, or price increases without notice, I can help you recover your money and hold companies accountable.

Schedule a Consultation

California SaaS Billing Dispute Rights

California's Automatic Renewal Law (Business & Professions Code 17600-17606) is one of the strongest subscription protection laws in the nation. It requires SaaS companies to clearly disclose auto-renewal terms, obtain affirmative consent, provide easy online cancellation, and send reminder notices before free trial conversions. Violations make the entire subscription unenforceable.

Common SaaS Billing Violations

Your Remedies Under California Law

If a SaaS company violates California's consumer protection laws, you are entitled to: (1) Full refund of all charges under a non-compliant auto-renewal agreement, (2) Actual damages under the CLRA, (3) Punitive damages for willful violations, (4) Mandatory attorney fees if you prevail, and (5) Credit card chargebacks for unauthorized transactions. Send a formal demand letter citing these laws to maximize your chances of a quick refund.