Attorney on Law

Revised Law Impacts Conduct of Business in Office and at Home

The ease of automatic renewals is countered by strict new requirements in General Business Law attached to their use.

Lance Plunkett, J.D., LL.M.

The 2025-2026 New York State Budget contains few new laws related to dentistry. Note that the 2025 legislative session may have finished with the State Budget but is continuing in June with respect to other stand-alone bills.

The final budget did not include amendments to the Material Transactions Law that was covered extensively in the April Journal. Many people had expected that law to be expanded, but Gov. Hochul’s ideas on that were not adopted by the Legislature. However, the New York State Department of Health issued its promised model reporting form and instructions, which can be accessed at the following link: https://survey. alchemer.com/s3/8019921/Material-Transaction-Notice.

While the Material Transactions Law applies to dental practices, the $25-million gross revenue threshold seriously limits which dental practice transactions will need to be reported to the Department of Health. Of more interest in the State Budget are sweeping revisions to sections 527 and 527-a of the New York State General Business Law (GBL) concerning automatic renewals of subscriptions, memberships and other similar arrangements. The changes to the law follow an increasing trend in New York to enhance consumer protections. The new laws will mostly affect NYSDA but could also affect dental practices that offer patients in-house payment plan arrangements if they auto-renew, and dentists’ personal rights concerning their own subscriptions and memberships. The new laws take effect on Nov. 5, so there is time to come into compliance with them in advance.

Make it Clear and Conspicuous

GBL Section 527(1) defines an automatic renewal as “a plan or arrangement in which a paid subscription or purchasing agreement is automatically renewed at the end of a definite term for a subsequent term.” GBL Section 527-a(1)(a) makes it unlawful for any business making an automatic renewal or continuous service offer to a consumer to fail to present to the consumer, in a clear and conspicuous manner, the material terms of any automatic renewal offer or continuous service offer, including but not limited to:

1. A description of the product or service subject to renewal.

2. The amount of the costs that will be charged.

3. The frequency of charges.

4. The deadline by date or frequency by which the consumer must act to prevent or stop further charges.

5. The cancellation mechanisms described in the new law.

These items must be provided before consent to the offer or billing information has been requested and in visual proximity, or in the case of an offer conveyed by voice, in temporal proximity, to the request for consent to the offer.

If the offer also includes a free gift or trial, or the price is temporary, the offer shall include a clear and conspicuous explanation of how and when the price will change and the price or prices that will subsequently be charged to the consumer. “Clear and conspicuous” is defined in GBL Section 527(2) to mean in larger type than the surrounding text, or in contrasting type, font or color to the surrounding text of the same size, or set off from the surrounding text of the same size by symbols or other marks, in a manner that clearly calls attention to the language.

In the case of an audio disclosure, “clear and conspicuous” means in a volume and cadence sufficient to be readily audible and understandable.

The cancellation mechanisms in the new law are described in GBL sections 527-a(1)(d) and 527-a(1) (d-1). Section 527-a(d)(1) makes it unlawful to fail to provide the consumer with the option to cancel at any time using a simple cancellation mechanism that is as easy to use as the mechanism that the consumer used to provide consent and that is through the same medium that the consumer used to provide consent.

GBL Section 527-a(1)(d-1) also makes it illegal to fail to provide the consumer with the option to cancel at any time through all mediums by which the business allows a consumer to provide affirmative consent to the automatic renewal, continuous service offer or any price increase.

Where consent was obtained in person, in addition to offering cancellation, where practical via an in-person method similar to what the user used to consent, the business shall at least offer cancellation through an online mechanism or over a telephone number.

Note that price increases cannot be easily hidden under the new law. Special provisions cover situations where any increase in price is involved. Section 527-a(1)(b) makes it illegal to charge the consumer or the consumer’s account with a third party (like a credit card or bank account) for the initial term of an automatic renewal or continuous service offer without first obtaining the consumer’s affirmative consent to the agreement containing the terms of automatic renewal or continuous service offer, including the terms of an automatic renewal or continuous service offer that is made at a promotional or discounted price for a limited period of time.

In addition, GBL Section 527-a(1)(b-1) makes it illegal to charge the consumer or the consumer’s account with a third party following an increase in price, or a price higher than what was disclosed pursuant to the original required disclosures, relating to an automatic renewal or continuous service offer to which the consumer previously consented, without either: 1) first obtaining the consumer’s affirmative consent to such increased price; or 2) allowing the consumer to cancel such automatic renewal or continuous service anytime within, at least, fourteen days after such charge and refund the consumer in the amount equivalent to the price of the remaining term of the service, at the time of such cancellation, on a pro rata basis.

However, a business is not required to obtain affirmative consent from the consumer regarding a price increase, or a price increase not disclosed in the original automatic renewal or continuous service offer, more than once prior to charging the consumer the increased price.

Give Prompt Notice

GBL Section 527-a(1)(c) also makes it illegal to fail to provide notice promptly following obtaining affirmative consent in a manner that is capable of being retained by the consumer. Such notice must include:

1. The terms of the automatic renewal or continuous service agreement.

2. The amount of costs that will be charged.

3. The frequency of charges.

4. The deadline by date or frequency by which the consumer must act to prevent or stop further charges.

5. The cancellation mechanisms required under the new law.

This notice is separate from the notice described above in GBL Section 527-a(1)(a).

GBL Section 527-a(1)(e) makes it illegal to impose unreasonable or unlawful conditions upon, refuse to acknowledge, obstruct or unreasonably delay cancellation requested or attempts to request cancellation by a consumer. In addition, the law defines unreasonable or unlawful conditions to include, without limitation, hanging up on consumers who call to cancel, providing false information about how to cancel, misrepresenting the consequences or costs of cancellation, or misrepresenting the reasons for delays in processing consumers’ cancellation requests.

If a consumer conveys a request to cancel, the business may present the consumer with a discounted offer, retention benefit or information regarding the effect of cancellation but may not impose unreasonable or unlawful conditions upon the consumer’s ability to cancel, or refuse to acknowledge, obstruct or unreasonably delay the cancellation requested.

The new law also limits the ability to impose any extra charge for renewals. GBL Section 527-a(1)(f) makes it illegal to fail to notify a consumer of an automatic renewal or continuous service charge for an automatic renewal or continuous service offer with an initial paid term of one year or longer, provided that such automatic renewal or continuous service renews for a paid term of six months or longer, at least fifteen days before, but not more than forty-five days before, the cancellation deadline for such automatic renewal in the manner selected by the consumer, including text, email, app notification, or any other notification channel offered by the business. Such notice must include instructions on how to cancel the renewal charge.

Similarly, Section 527-a(1)(g) makes it illegal to fail to provide a consumer who has accepted an automatic renewal or continuous service offer with a clear and conspicuous notice of any material change to the terms of the automatic renewal or continuous service offer, including any price increases, at least five business days prior, but no more than thirty days prior, to the date of the change, in the same manner as required for notice of renewal charges.

Similarly, GBL Section 527-a(1)(h) makes it illegal to fail to notify a consumer of an automatic renewal or continuous service charge for an automatic renewal or continuous service offer if the automatic renewal or continuous service offer includes a free gift or trial for a period of more than a month, followed by an upcoming automatic renewal or continuous service charge, at least three days before but not more than twenty-one days before the cancellation deadline for the first chargeable period in the manner selected by the consumer, including text, email, app notification or any other notification channel offered by the business. Such notice shall include instructions on how to cancel the renewal charge.

Finally, GBL Section 527-a(2) provides that in any case in which a business sends 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 shall for all purposes be deemed an unconditional gift to the consumer, who may use or dispose of the same in any manner such consumer sees fit without any obligation whatsoever on the consumer’s part to the business, including, but not limited to, bearing the cost of, or responsibility for, shipping any goods, wares, merchandise or products to the business.

The New York State Attorney General may seek injunctive relief to stop any business from violating the new law. In addition, a court may impose a civil penalty of not more than $100 for a single violation and not more than $500 for multiple violations resulting from a single act or incident. A knowing violation of the law is punishable by a civil penalty of not more than $500 for a single violation and not more than $1,000 for multiple violations resulting from a single act or incident. However, no business is deemed to have violated the provisions of the law if the business shows, by a preponderance of evidence, that the violation was not intentional and resulted from a bona fide error made notwithstanding the maintenance of procedures reasonably adopted to avoid such error.

Laws Favor Consumers

New York State is increasingly enacting stronger consumer protection laws that impose burdens on all businesses. When dentists are consumers, they may find the new laws helpful. When dentists offer certain deals through their professional practices, they may find the new laws cumbersome.

New York is not alone in having concerns with people getting trapped in automatic renewal arrangements from which they find it difficult to extricate themselves, especially when they include price increases. The federal government and other states have been moving in a similar direction. This is an issue where self-interest plays a big role. Anyone who has felt he or she is a victim of an autorenewal scheme agrees with the consumer-friendly direction the new law takes.

The material contained in this column is informational only and does not constitute legal advice. For specific questions, dentists should contact their own attorney.