Many popular retail startups use subscription services to encourage customers to continue paying for a particular service that was delivered monthly. However, this subscription business model has come under fire in recent years because it is extremely difficult to cancel and comes with a monthly fee.
Furthermore, the subscription business has been hit hard in recent months and years from consumers who argue that signing up for a free trial does not provide them with appropriate disclosures about what is involved in canceling the plan or that they will eventually be charged.
A recent Adore Me subscription lawsuit claims that the company used misleading terms to sign customers up for their lingerie subscription service.
Claims Lodged in Now-Settled Adore Me Subscription Lawsuit
The Adore Me subscription lawsuit, initiated by the Federal Trade Commission (FTC), argued that the company violated the Restore Online Shoppers’ Confidence Act by making it difficult for consumers to discontinue credit card charges and cancel memberships.
According to the Adore Me subscription lawsuit, the FTC also alleged that the lingerie company misrepresented their store credit policy. Although the company told customers that the store credits could be used at any time, unused credits were revoked after customers canceled their memberships from the subscription model. Consumers contacted the company in an effort to redeem their credits but were informed that since their membership was canceled that no credits could be used — a policy customers say is not explained upfront.
The settlement in the Adore Me subscription lawsuit would be used to pay consumer refunds. The FTC wrote in their complaint that the consumers have already suffered and would continue to suffer substantial injury as a result of the company’s practices. Bloomberg conducted an investigation into Adore Me prior to the lawsuit, finding that many customers found it difficult or impossible to unsubscribe from the service.
Adore Me does not admit or deny any wrongdoing with these practices under the terms of the settlement.
According to the lawsuit, every month Adore Me subscription members had to pay $39,95. Then they would get funneled into a VIP membership receiving store credit or discounted underwear. The monthly fee would continue unless the consumer opted out during the first couple of days of the month.
Subscription Companies Come Under Fire for Cancellation Policies and More
A number of online retailers have been in the spotlight recently for relying on these subscription models to trap individuals into reoccurring charges.
Previous settlements and penalties have been aligned with the subscription business model. For example, a 2015 penalty payment from Stamps.com led to $2.5 million and up to $1.5 million in restitution to shoppers who alleged deceptive subscription marketing for the mailing company. Just Fab, which owns Fabletics and ShoeDazzle also paid $1.8 million to settle similar subscription services claims.
If you or someone you know has been affected by those named in the subscription lawsuit, you may be entitled to recovery with the help of an experienced attorney. Fill out the online form to contact the lawyers at Bradley/Grombacher today.
Note: Bradley/Grombacher is not representing the plaintiff in this lawsuit.