California’s Automatic Renewal Law (ARL) Update: Essentials for Subscription-Based Businesses

Overview

Effective July 1, 2025, California’s recently amended Automatic Renewal Law (ARL) imposes tighter regulations on businesses that offer subscriptions, memberships, or other recurring services. These changes come in response to growing consumer complaints around unclear renewal terms and difficult cancellation processes, prompting lawmakers to demand greater transparency and fairness.

If your business operates on a subscription model—whether for software-as-a-service (SaaS), fitness memberships, streaming platforms, or recurring deliveries of goods—this update is not just relevant; it’s critical.

Key Updates Under the Amended ARL

Here’s what every subscription business should know:

1. Affirmative Consent & Recordkeeping

Under the revised ARL, businesses must obtain express affirmative consent from consumers before charging for any automatic renewal or continuous service. Critically, companies are now required to retain proof of this consent for at least three years or one year after cancellation, whichever is longer. Passive acceptance (such as pre-checked boxes) no longer meets compliance standards.

Tip: Use click-to-agree checkboxes that are clearly presented and non-preselected. Make sure your system logs the time, date, and method of consumer consent.

2. Mirrored Cancellation Method

The law now mandates that cancellation must be as easy as enrollment. If a consumer signed up online, they must be allowed to cancel online—without forcing a call or mail-in request. For phone-based subscriptions, voicemails must be returned within one business day.

Tip: Create a user-friendly “Manage My Subscription” section on your website with immediate cancellation capability.

3. Mandatory Reminder Notices

If your subscription includes an initial term of one year or longer or renews annually, you must now send a clear reminder notice 15 to 45 days before renewal. This notice must include:

• The upcoming renewal date
• The renewal amount or method for calculating it
• Instructions on how to cancel
• Failure to do so can void your ability to enforce the auto-renewal provision.

4. Truthful Marketing Obligations Expanded

The ARL now prohibits misleading or deceptive language not only about auto-renewal terms but across the entire transaction. This includes pricing structures, promotional terms, cancellation rights, and product descriptions.

Tip: Review your website, checkout flows, email confirmations, and marketing materials for potential misstatements—even unintentionally misleading phrasing.

Why It Matters: Legal and Business Risks

Noncompliance with the ARL carries serious risks, including:

• Enforcement actions by the California Attorney General or local District Attorneys
• Civil penalties and orders for restitution
• Class action lawsuits under California’s Unfair Competition Law and False Advertising Law
• Brand damage due to negative media coverage and consumer backlash

For businesses in SaaS, e-commerce, fitness, media, and beyond, this is not a regulation to overlook.

How Anelya Law Offices Can Help

At Anelya Law Offices, we help subscription-based businesses stay ahead of legal changes while preserving the integrity of their user experience. We offer:

Subscription Agreement Audits: We’ll review your sign-up flows, terms and conditions, and renewal disclosures for ARL compliance.

Consent & Recordkeeping Strategy: Ensure your backend systems track and retain user consent in a defensible way.
Cancellation Process Reviews: Simplify cancellation while staying compliant.
ARL “Health-Checks”: Get a full legal diagnostic and action plan tailored to your business.
Let’s Talk

If you operate a subscription-based business in California and are unsure whether your current practices meet the new ARL standards, we invite you to contact us at Anelya Law Offices. We’re here to help you protect your business while maintaining consumer trust.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Every business situation is unique. To receive legal advice specific to your company’s needs, please consult with an attorney.