HB1225: HB1225 Contracts; automatic renewal provisions; provide certain consumers a pro rata refund relative to a canceled service contract in the event of a price increase

Georgia law already requires companies that sell services under contracts lasting 12 months or longer with automatic renewal clauses to notify consumers in writing or electronically before the contract renews. This bill adds a new protection: if a service contract automatically renews for a year or more and the price the consumer pays goes up by 50 percent or more, a consumer who forgets to cancel in time can still get money back. Under the bill, that consumer would be entitled to a pro rata refund, meaning a partial refund calculated based on how much of the renewal period was left unused when they finally canceled. The consumer would have 45 days after the cancellation deadline to claim it. The bill also keeps an existing rule requiring extra written consumer acknowledgment for contracts that renew for more than 24 months. The changes would take effect December 31, 2026, and only apply to contracts signed on or after that date.

• Adds a right for consumers to get a pro rata (proportional) refund if they miss the cancellation deadline on a contract that renews for a year or more and raises the price by 50 percent or more.
• Sets a 45 day window after the cancellation deadline during which the consumer becomes entitled to the refund once they cancel.
• Defines the refund amount using a formula based on days elapsed since renewal divided by the total length of the renewal term.
• Keeps the existing requirement that sellers notify consumers 30 to 60 days before an automatic renewal deadline, disclosing that the contract will renew and how to cancel.
• Retains a rule that contracts renewing for more than 24 months are only enforceable if the seller gets written or electronic acknowledgment and an affirmative response from the consumer that they don't intend to cancel.
• Sets the effective date as December 31, 2026, applying only to contracts entered into on or after that date.

Consumers in Georgia who sign long-term service contracts with automatic renewal clauses, and businesses (sellers) that offer such contracts, including subscription-based services, gyms, and similar recurring service providers.

Consumers who forget to cancel a renewing contract and then face a big price hike would no longer simply be stuck paying the higher rate for the full term; they could get back a portion of what they paid for the unused part of the contract, shifting some financial risk back to sellers.

• Section 1 revises O.C.G.A. § 13-12-3, keeping the existing 30 to 60 day advance notice requirement for contracts of 12 months or more that automatically renew.
• Section 1(b) creates the new pro rata refund right for consumers when a renewing contract of a year or more raises the price by 50 percent or more and the consumer misses the cancellation deadline.
• Section 1(b) requires the refund to be based on days elapsed since renewal divided by the total length of the renewal term, claimable within 45 days after the cancellation deadline.
• Section 1(c) preserves the rule that contracts renewing for more than 24 months need written consumer acknowledgment and an affirmative response to be enforceable.
• Section 2 sets the effective date as December 31, 2026, applying only to contracts entered into on or after that date.
• Section 3 repeals conflicting laws.

1. 2026-02-09House Second Readers (House)
2. 2026-02-06House First Readers (House)
3. 2026-02-05House Hopper (House)

• Carter Barrett (R, HD-024)Primary sponsor
• Chuck Efstration (R, HD-104)
• Houston Gaines (R, HD-120)
• Scott Holcomb (D, HD-101)
• Beth Camp (R, HD-135)
• Jan Jones (R, HD-047)

• consumer protection
• automatic renewal contracts
• subscription services
• refunds
• service contracts