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Guthy-Renker Pays Millions to Clear up Proactiv Auto Renewal Lawsuit

A California federal judge has approved a class action settlement that will provide up to $15.2 million in cash or potentially $57 million in free products to consumers who received unwanted Proactiv skin care products due to a deceptive automatic renewal scheme.

Lead plaintiff Jennifer Habelito alleges in the Proactiv automatic renewal lawsuit that she purchased the skin care products online thinking that she had made one-time transaction. Habelito said she was surprised when another shipment of Proactiv showed up and she was charged for the additional product.

According to the Proactiv class action lawsuit, the plaintiff had been charged under an automatic renewal policy that she wasn’t aware of and had never approved.

The Proactiv automatic renewal lawsuit alleged that the company did not obtain affirmative consent from consumers before enrolling them in their subscription service. In fact, according to the lawsuit, Proactiv did not even offer the option to buy a single product at one time – all consumers were enrolled in an automatic renewal plan. This resulted in thousands of consumers being charged for Proactiv products they did not want.

“On information and belief, in crafting its automatic delivering and billing policies, Proactiv has focused on profits, maximizing its revenue by imposing upon consumers as much unwanted product as possible and charging them according, regardless of the frequency with which an individual might even need replacement,” alleged the plaintiff in her Proactiv automatic renewal lawsuit.

A California judge approved the Proactiv class action settlement in February.

Under the terms of the Proactiv settlement, Californians who purchased Proactiv skin care between Jan. 22, 2009 and July 8, 2014, and were auto-billed and shipped products beyond their initial purchase, will be entitled to $20 to $75. The amount of the award will depend upon how many Class Members claim a cash refund. Proactiv has agreed to pay up to $15,220,100 in cash claims.

Class Members that wish to receive free skin care products instead of cash can receive a minimum of $75 in free Proactiv products. The total value of free products, if accepted by all Class Members, is $57,075,375.

Proactiv has also agreed to revise its automatic renewal practices and policies to make continuous service offers more clear and conspicuous to consumers. Proactiv has also agreed to obtain affirmative consent from consumers before enrolling them in an auto renewal plan.

More details on the Proactiv class action settlement, including claim filing instructions, can be found here.

The Proactiv Class Action Lawsuit is Jennifer Habelito v Guthy-Renker LLC, Case No. BC 499558, in the Superior Court of the State of California for the County of Los Angeles.

Are Auto Renewal Subscriptions Legal?

If an automatic renewal charge has ever taken you by surprise, you may wonder if companies are allowed to do this. Companies have been using automatic renewal plans more and more, but states are taking action to reign in abuses.

Some states have enacted legislation requiring companies to meet certain standards when they have an automatic renewal plan. Additionally, courts have determined that companies must follow the law in the state where the consumer is located, so companies that sell products online should follow the strictest state policy.

California has enacted legislation regulating the use of automatic renewals. Under California law, companies must ensure their policies meet the following requirements;

  • Clear and conspicuous terms and conditions;
  • Affirmative consent of the consumer must be obtained;
  • Cancellation and terms of the automatic renewal must be described before the customer is asked to agree;
  • Companies must provide notice of material changes to the automatic renewal policy;
  • Customers must receive notice that they will be charged.

If you have been hit with an unexpected automatic renewal charge that may violate the law, you should contact an experienced attorney. An attorney can help you figure out what your rights are and may also be able to get you involved in a class action lawsuit that will hold unscrupulous companies responsible for their automatic renewal scams.

Contact the automatic-renewal attorneys at Bradley/Grombacher for a FREE case evaluation by filling out the form on this page now.

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