On April 11, Tennessee enacted SB 41 (the “Act”), which relates to consumer billing practices related to telephone, cable television, internet and broadband services. The Act regulates how service providers bill consumers upon the termination of service agreements or contracts. It sets forth specific guidelines to ensure fair billing practices when consumers decide to end their contracts for covered services.
Under the Act, starting July 1, service providers must adhere to new billing rules when a consumer terminates an agreement to prevent unfair service charges. If the termination occurs within the first half of a billing cycle, the provider is permitted to bill the consumer only for the remainder of that cycle and may not charge the consumer for any subsequent billing cycles. Alternatively, if termination happens in the second half of a billing cycle, the provider may bill for the remainder of that cycle and one additional billing cycle.
The Act also clarifies that service providers can include terms or periods of minimum duration within service agreements, ensuring that contractual obligations are respected while maintaining consumer protection. Violations of these billing practices are classified as unfair or deceptive acts under the Tennessee Consumer Protection Act of 1977, subjecting offenders to penalties and remedies outlined in the Act.
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