N.J. lawmaker drafts bill to tame ‘zombie contracts’

Customers would have to be notified before a service contract is renewed if a measure in the New Jersey legislature becomes law. Assemblyman Dan Benson says many consumers don’t realize those contracts can be automatically renewed until they see the charges on their credit card bill.

“I like to call this the zombie contract bill because these are the services you just can’t kill,” Benson said. “Every time you try to call and cancel you have to wait a whole other year before you can do it again.”

Legislation Benson sponsored would require sellers to give consumers 30 to 60 days notice about how to cancel the contract before it’s renewed.

Violators could face fines up to $20,000.

Benson says cable TV, electric, gas, and water utilities regulated by the state would be exempt from the bill’s requirements.

“This is to cover kind of the Wild West on the Internet that you see. Gym memberships, health care clubs, and other places that do not allow you to cancel, even in person or written or otherwise. This at least makes sure that you know how to do that in a timely manner,” he said.