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Amending Title 9 of The Philadelphia Code, entitled “Regulation of Businesses, Trades and Professions,” by adding a new Chapter 9-7000, entitled “Cancellation of Re-Occurring Memberships,” to establish restrictions on businesses offering automatic renewal or continuous service offers to consumers.
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THE COUNCIL OF THE CITY OF PHILADELPHIA HEREBY ORDAINS:
SECTION 1. The Council of the City of Philadelphia finds and declares as follows:
Legislative Findings and Purpose.
The automatic renewal of contracts, such as monthly subscriptions, memberships, and/or conversion of free trials to paid subscriptions is an increasingly common business model for both brick-and-mortar establishments and online retailers and service providers.
Businesses that enroll customers in recurring subscriptions, offer auto-renew features, and convert free trials to paid subscriptions may fail to disclose all conditions of the subscription, fail to provide consumers with notice when charging them for such service, fail to offer an easy way to cancel a subscription, and/or establish difficult, time-consuming, and coercive roadblocks to cancellation that entrap consumers in unwanted subscriptions, and rely on consumers’ lack of action – also known as the negative option – to keep customers enrolled in unwanted services.
The importance of regulating businesses offering these automatically renewing subscription services has been recognized by federal and state governments, as well as peer cities.
The City of Philadelphia has established its interest in protecting consumers from unfair and deceptive business practices through affirmative litigation, as enabled through the Consumer Protection Ordinance, enacted in 2024.
The purpose of this Chapter is to enhance consumer protection from unjust and improperly disclosed subscription offers, such as automatic renewal of payments or contracts, or arrangements, including free trials, that convert into paid subscriptions; and to enable ...
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