Auto-Renewal Class Actions
As the use of automatic renewals for subscription services and other items increases, more consumers are turning to class action lawsuits when companies hit them with unexpected fees.
Auto-renewal has become an attractive option for companies looking to sell goods and services online. It allows companies to use consumers’ financial information to charge them on a recurring basis for everything from streaming services, meal prep boxes, and beauty items; however, consumers have complained of an increase in deceptive auto-renewal practices, such as hard to cancel renewal fees and outright fraud.
As consumers lose millions of dollars to these practices, more are turning to auto-renewal class actions to hold companies accountable. A class action lawsuit allows consumers to band together to file legal action against a company that has duped them out of money. Victims of auto-renewal schemes may not have lost a significant amount of money on an individual basis, but as a class, they may have lost millions.
Major companies have been hit with auto-renewal class actions recently, including Spotify, Hulu, Dropbox, JDI Dating, Sirius, and SeaWorld. Some companies choose to settle class action lawsuits. Some settlements require companies to pay millions to a class of consumers. Settlement agreements can also lead to large awards to the lead plaintiffs who initiated the class action lawsuit.
Consumers have alleged in their auto-renewal class actions that the companies used deception to obtain their financial information and sign them up for automatic renewal fees without their knowledge or consent.
Using an auto-renewal class action lawsuit, consumers can hold a company accountable for false advertising and fraud and also for violating any state laws and federal regulations that have been enacted to protect consumers.
Over twenty different states have enacted laws protecting consumers from auto-renewal schemes. Oregon and California have the strictest auto-renewal laws. Additionally, the Federal Trade Commission has pursued companies using deceptive automatic renewal schemes, often sparking an auto-renew class action as well.
Under most state laws and regulations, companies who use auto-renewal practices must adhere to the following standards:
- Providing clear and conspicuous terms
- Obtaining affirmative consent from consumers;
- Notifying consumers of any changes to the terms of the auto-renewal;
- Providing clear cancelation terms; and
- Providing consumers notice of upcoming fees prior to charging for the auto-renewal.
Unfortunately, some companies do not comply with these standards and use deceptive auto-renewals to trick consumers out of millions. Often these schemes are associated with free trials or gifts that require consumers to enter their account information. Consumers sign up, but then forget or find it impossible to cancel the auto-renewal.
An experienced attorney can help if you’ve been the victim of a company’s auto-renewal scheme. An attorney can also help you join a class action lawsuit over a company’s deceptive auto-renewal practice. The attorneys at Bradley/Grombacher are investigating auto-renew class actions – call today!