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Consumer Subscription Fair Cancellation Act

Summary

This bill creates a new section in Title 59.1 of the Code of Virginia to prohibit companies from charging fees for the cancellation of subscription services, including digital software subscriptions. The bill establishes that any such fee constitutes an unlawful consumer practice and ensures that consumers may cancel subscriptions without financial penalty.

Legislative Findings

The General Assembly finds that:

  • Subscription-based services, including digital software platforms, are increasingly common in the modern economy;
  • Consumers are often subjected to cancellation fees, early termination penalties, or similar charges when attempting to end subscription services;
  • Such fees may operate as a barrier to consumer choice and may constitute unfair or coercive business practices;
  • Ensuring the ability to cancel a subscription without penalty promotes fair competition, transparency, and consumer autonomy.

Proposed Code Section

§ 59.1-XXX. Prohibition on cancellation fees for subscription services.

A. As used in this section:

"Subscription service" means any service, including digital software, provided to a consumer on a recurring basis in exchange for periodic payments, including but not limited to monthly or annual billing arrangements.

"Consumer" means a natural person who purchases or contracts for a subscription service for personal, family, or household purposes.

B. No supplier shall charge, impose, or collect any fee, penalty, or other charge solely for the cancellation, termination, or non-renewal of a subscription service by a consumer.

C. The prohibition in subsection B includes, but is not limited to:

1. Early termination fees;

2. Cancellation processing fees;

3. Charges described as forfeiture of discounts or benefits, when such charges are contingent solely upon cancellation of the subscription.

D. Nothing in this section shall prohibit:

1. Charges for services rendered prior to cancellation;

2. The enforcement of a bona fide fixed-term contract, provided that:

a. The terms of such contract are clearly and conspicuously disclosed at the time of enrollment; and

b. The consumer affirmatively agrees to such terms.

E. Any provision in a contract that violates this section shall be void and unenforceable as contrary to public policy.

F. A violation of this section shall constitute a prohibited practice under the Virginia Consumer Protection Act (§ 59.1-196 et seq.) and shall be subject to all applicable enforcement provisions, remedies, and penalties.

Implementation

The provisions of this act shall become effective on July 1, 2027.

Notes

  • This section is intended to be codified within Title 59.1 (Trade and Commerce), governing consumer protection.
  • The bill applies broadly to subscription-based business models, including digital software providers such as those offering cloud-based or licensed software services.
  • The bill establishes a per se prohibition similar in structure to other unlawful consumer practices under Virginia law.