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Automatic Renewals Are a Runaway Freight Train, but Lawsuits Are Fighting Back

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Sacramento, CAThe passage of California’s automatic-renewal law in 2010 and the rise in class-action lawsuits that have resulted is indicative of a transition by an increasing number of retailers and service providers to a model that was once the bastion of the magazine industry. And while service providers appear to finally be getting the message that terms need to be communicated to the consumer in a clear and conspicuous manner, more and more consumers are turning to the courts and filing a California Auto-Renewal Lawsuit after getting dinged with charges of which they were unaware of or never agreed to, or so it is alleged.

A classic example of service providers attempting to play fast and loose with California regulations that all agree are thorough and broad in scope, are tactics deployed by a collection of marketers vending skin care products online. According to a complaint lodged by the Federal Trade Commission (FTC), various defendants identified in Automatic Renewal Program lawsuits advertised risk-free trials for skin care products that would be shipped to consumers at a cost that would never exceed $4.95 - in other words, the products appeared to be provided free of charge as a risk-free trial, for just the cost of shipping.

In reality, or so many an Auto-Renewal Subscription Program lawsuit continues to allege, the vendor would debit the consumer’s credit or debit accounts for the actual cost of the products - as much as $97.88 - unless the products were returned within 10 days. Not only is it alleged that consumers were unaware of this requirement, many claim that products arrived so close to the 10-day window, or even after the window had closed, that it would have been impossible to return the products in time, even by courier.

Plaintiffs also were not aware, or so it is alleged, that consumers would be automatically entered into a subscription program that would see a parade of products arriving each month under similar terms.

The California Business and Professions Code Section 17600, et seq., prohibits retailers, vendors and service providers from charging consumers’ accounts without express and explicit consent. Not only that, offers for automatic renewals and continuous service must be stated in a “clear and conspicuous manner” under the law, with large type that contrasts against the remainder of the document so that the consumer’s attention will be called to it. Such offers must also be made, identified and presented before the signature line (not after) and within immediate proximity.

The law is pretty clear.

There are other laws, such as the Restore Online Shoppers’ Confidence Act (ROSCA), a federal statute passed by Congress. The aforementioned skin care products debacle involved a complaint by the FTC that the vendor’s marketing tactics were in violation of ROSCA, the FTC Act and the Electronic Funds Transfer Act, as well as California law. It was alleged that not only did defendants fail to adequately disclose terms that would help consumers avoid the $97.88 fee, a $15 restocking fee on returned items was also alleged to have been disclosed improperly.

With the ease of online commerce, more vendors and service providers are embracing the automatic-renewal model as an easy way to dupe consumers into paying fees they might not notice at all, or are perhaps to busy to fight.

Since the California Auto-Renewal statute was passed, lawsuits have been brought against Google, Apple, Spotify, Lifelock, and Blue Apron amongst other companies, alleging charges have been levied and subscriptions renewed with affirmative consent.

To that end, the number of disgruntled consumers filing an Automatic Renewal Program Lawsuit appears to be on the rise…

READ ABOUT AUTO-RENEWAL PROGRAM LAWSUITS

Auto-Renewal Program Legal Help

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READER COMMENTS

Posted by

on
Beware of Norton (Symantec) Anti-Viral Software. Every year when I pay them for the same usage, they CHANGE my "Personal Setting", in my online account, to Auto-Renewal. There should be a law that companies cannot change your "personal settings"!

Posted by

on
it is about time someone has reigned these stupid piss ant vultures in. I am tired of singing on to a free trial then they decide that the free trial gets charged in after 2 weeks. they bill my debit card a hundred or 2 hundred dollars and then they place you on auto ship billing cycle. Then you have to threaten them over the phone and you may get your money back. I no longer sign up for free trials hoping to find something that fights my constant pain I have daily. I wish all these sorry illegal a$$es burn in hell! They never put it in the main page where you pay the shipping fee that they charge after 2 weeks. That stuff is always hidden away 2 or 3 pages away? I am fed the hell up?

Posted by

on
Another thing they might do is make Credit Cards refuse to allow an automatic rebilling unless you contact them and verify the repeat program with your Personal Pin Number, or the charge doesn't go through. I have my Credit Cards contact me with any charge over $50 so I have a chance to verify my activity before the charges go through. I agree that this Auto Billing program needs to be brought out of the closet, or shut down in it's current form of small print and unlike Obama's details of Illegal's, this is truly hiding in the shadows...

Posted by

on
Don't for forget Dr David Williams. VERY notorious for automatic shipments unless you call their 800 number and cancel. And even then you are forced to listen to several up-sells before they actually cancel.

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