Walgreens Consumer Class Action Lawsuit

Consumer Class Action Complaint Against Walgreens

Walgreens Consumer Class Action Lawsuit

Tauler Smith LLP recently filed a consumer class action complaint against Walgreens because the retail behemoth is allegedly selling Phenazopyridine Hydrochloride (Phenazo), an unapproved over-the-counter UTI drug, to unsuspecting customers in violation of California’s consumer protection laws. The class action suit, which was filed in federal court in California, alleges that Walgreens uses misleading advertising to deceptively sell Phenazo to treat urinary tract infections even though the drug is unsafe, ineffective, and unlawful to market to consumers.

For more information about the Walgreens UTI drug lawsuit, keep reading this blog.

What Is the FDA Approval Process for Over-the-Counter Drugs?

The U.S. Food and Drug Administration (FDA) regulates the safety and effectiveness of prescription and nonprescription drugs sold in the United States. Before over-the-counter drugs like Phenazo can be sold to consumers, they must be approved by the FDA. This can happen in one of two ways:

  1. The drug goes through the standard FDA approval process, which involves submitting a New Drug Application (NDA).
  2. The drug receives a drug monograph.

A drug monograph is a process that drug manufacturers can utilize to get their products approved for specific therapeutic uses in a particular category. In other words, a drug monograph is a way around the requirement for FDA approval as a finished drug.

New Drug Applications

Under authority granted by the Federal Food, Drug, and Cosmetic Act (FDCA), the FDA typically requires drug manufacturers to submit a New Drug Application (NDA) or an Abbreviated New Drug Application (ANDA) and provide clinical trial data to demonstrate the safety of a new drug before they can market it as a finished drug product.

When the FDA requested data on the safety and efficacy of all OTC urinary antiseptics/analgesics not yet reviewed by the FDA, the request included Phenazopyridine Hydrochloride (Phenazo). In this notice, the FDA stated that Phenazo had not been the subject of an approved NDA, meaning that the UTI drug’s safety was not demonstrated to the satisfaction of the federal regulatory agency.

OTC Drug Monographs

An OTC drug monograph allows drug manufacturers to lawfully market certain over-the-counter drugs based on the safety of a drug’s active ingredients. The monograph process involves a “rule book” that defines specific conditions under which an OTC drug may be considered safe and effective in a given therapeutic category. Under this approach, a manufacturer does not need FDA approval to bring the nonprescription drug to market because only certain ingredients are being marketed as safe for a particular use within a particular therapeutic drug category.

What Is Phenazopyridine?

Phenazopyridine Hydrochloride (Phenazo) is an over-the-counter drug used to treat symptoms of urinary tract infection (UTI), including urinary pain, burning, and discomfort. UTI is a medical condition that disproportionately impacts women, particularly women in underserved communities.

Millions of Americans trust pharmacies to sell them safe, effective, and lawful remedies for their illnesses, including urinary tract infections. For these consumers, pharmacies are the primary point of purchase for over-the-counter drugs, as well as the primary source of information for over-the-counter medications. Reliance on OTC medications is heightened in underprivileged communities where residents are more vulnerable to illness and health concerns due to lack of access to medical care.

Phenazo is marketed and advertised as a drug for urinary tract infections – but the UTI drug has not been approved by the FDA, which means that stores like Walgreens should not be selling it as an over-the-counter treatment.

Walgreens Sued for False Advertising of UTI Drug Phenazo

Argueta v. Walgreens Co. is a high-profile consumer class action lawsuit against the Walgreens Company, which operates the second-largest pharmacy store chain in the United States. The lawsuit, which was filed in the U.S. District Court for the Eastern District of California, accuses the pharmacy of unlawfully selling Phenazopyridine Hydrochloride (Phenazo) over the counter and marketing the misbranded drug as a finished drug product called “Urinary Pain Relief.”

The Walgreens class action alleges that Phenazo has never been approved by the FDA under the NDA/ANDA process, nor has Phenazo ever been brought to market under an established OTC drug monograph. In other words, the drug is allegedly being marketed and sold by Walgreens in violation of California consumer fraud laws.

Walgreens Accused of Violating California’s Unfair Competition Law (UCL)

Walgreens has been accused of violating California’s Unfair Competition Law (UCL) by selling the unapproved OTC drug Phenazo. The UCL is a far-reaching consumer protection statute that applies to many different kinds of unethical business practices, including hidden shipping insurance surcharges, false reference pricing, and deceptive advertising of over-the-counter drug products. The statute explicitly prohibits any “unlawful, unfair or fraudulent business act or practice,” as well as “unfair, deceptive, untrue or misleading advertising.” The basis for the class action lawsuit against Walgreens is that the pharmacy allegedly sells the Phenazo product in a manner that is likely to deceive the public about whether the drug is approved by the FDA and therefore lawful to sell over the counter.

Importantly, the UCL is a strict liability statute. This means that the plaintiff in a UCL claim does not need to show that the defendant intentionally or negligently engaged in fraudulent business practices; all that is needed is a showing that the unfair practice or act occurred. In other words, anyone who purchased an over-the-counter UTI drug product from Walgreens may be entitled to multiple forms of compensation, including restitution, statutory damages, and punitive damages.

Did You Purchase a UTI Drug at Walgreens? Call the California Consumer Protection Lawyers at Tauler Smith LLP

The California consumer protection lawyers at Tauler Smith LLP have filed a class action lawsuit against Walgreens over the sale of Phenazopyridine as an over-the-counter treatment for urinary tract infections. The proposed class of consumers eligible for the lawsuit includes anyone who purchased the Walgreens UTI product in California during the last four (4) years.

Call 310-590-3927 or email us to schedule a free consultation.

Tony Robbins CIPA Lawsuit

CIPA Lawsuit Against Tony Robbins Company

Tony Robbins CIPA LawsuitA CIPA lawsuit against the Tony Robbins Company was recently filed in a California superior court. The self-help business has been accused of secretly wiretapping the communications of website users in violation of the California Invasion of Privacy Act, or CIPA. Beyond that, the company has been accused of allowing third parties to use digital surveillance tools to monitor user behavior and eavesdrop on visitor conversations without express or implied consent, which is also a violation of state consumer privacy laws.

To learn more about the class action complaint against the Tony Robbins Company, keep reading.

Class Action Complaint Against Robbins Research International

The defendant in the invasion of privacy case is Robbins Research International, Inc., which operates www.tonyrobbins.com. This is the official website of Tony Robbins, a celebrity self-help guru. Consumers in California and elsewhere access the website to purchase books, programs, and tickets to events on how to master all aspects of their lives.

The case, Haviland v. Robbins Research International, Inc., is being heard in the Los Angeles County Superior Court. The class action complaint alleges violations of the California Invasion of Privacy Act (CIPA), including illegally wiretapping internet communications, as well as aiding, abetting, and paying third parties to eavesdrop on internet conversations.

Illegal Wiretapping

The defendant has been accused of surreptitiously implanting code the Tony Robbins website that allows for the unauthorized recording of private conversations. The civil suit also alleges that the website code allows for the creation of transcripts of these conversations with site visitors. Both acts are violations of the California Invasion of Privacy Act (CIPA), which requires companies to obtain permission from customers before recording online conversations.

Due to the nature of the defendant’s business, customers who use the Tony Robbins website often disclose sensitive personal information via the website chat feature. This information goes beyond mere “record information” like the user’s name and address; it includes confidential information such as the user’s IP address, geolocation information, browsing history, and search history. The data collected by the defendant could enable the creation of detailed profiles about individuals for the purpose of delivering targeted advertisements specifically tailored to their personal interests. Significantly, the data collected from customers who use the website chat feature is allegedly harvested without consent.

Tony Robbins Company Accused of Sharing Customer Data with Third Parties

One of the major allegations in the civil suit against Robbins Research International is that the company allows a third party to collect a bevy of personal information from website visitors without their consent or knowledge. According to the complaint, the Tony Robbins company has entered into financial agreements with a third-party company, UserWay, to embed code into the website’s chat function. This code allegedly enables UserWay to covertly intercept and monitor the chat conversations in real time without the knowledge or consent of site visitors. In other words, the chats that users believe are taking place on the Tony Robbins website are actually occurring on UserWay.

According to the lawsuit, the company’s website privacy policy never discloses to users that the company can share and sell site visitors’ personal information to third parties. The unauthorized sharing of users’ personal information with third parties is a clear violation of the California Invasion of Privacy Act (CIPA). Moreover, the defendant’s alleged behavior is particularly egregious because website users have a reasonable expectation of privacy when they use a seemingly harmless chat box feature on www.tonyrobbins.com.

Customer Data Exposed

The defendant’s actions leave consumers exposed to significant privacy risks because their personal information is allegedly shared with a wide range of entities – and without any clear limitations or safeguards on how that personal information may be used.

Additionally, the lawsuit raises serious concerns about whether this digital privacy violation could further compromise the privacy and control of users’ information by opening the door for the dissemination of personal data to other entities for cross-context behavioral advertising purposes. This kind of invasive practice could subject users to relentless advertising campaigns across multiple platforms – without their consent or knowledge.

How Companies Violate the California Invasion of Privacy Act (CIPA)

The California Invasion of Privacy Act (CIPA) explicitly prohibits both wiretapping and eavesdropping of electronic communications unless all parties to the communication have first provided consent. Most website operators comply with these legal requirements by conspicuously warning visitors if their conversations will be recorded or if any third parties will be eavesdropping on them.

The invasion of privacy law is written in terms of wiretapping, with language barring companies from using a “machine, instrument, or contrivance” to illegally record and eavesdrop on conversations. But it is important to note that courts have found that Cal. Penal Code § 631(a) applies to internet communications. This means that any company that attempts to learn the contents of a website communication without the consent of all parties can be sued for violating the law.

The specific part of the digital privacy statute that Robbins Research International has been accused of violating is Section 631(a), which imposes liability on companies that invade the privacy of consumers. Section 631 is technically a criminal statute, but it does provide a mechanism for victims to bring a civil lawsuit and recover monetary damages.

Call the Los Angles Consumer Protection Attorneys at Tauler Smith LLP

The consumer protection lawyers at Tauler Smith LLP are representing California residents in a class action lawsuit against Robbins Research International. If you visited the Tony Robbins website and used the chat feature, you may be eligible to join the class action complaint. Call 310-590-3927 or email us today to schedule a free consultation.

CPRA Consumer Rights

Consumer Rights Protected by the CPRA

CPRA Consumer Rights

When the California Privacy Rights Act (CPRA) was approved by California voters in the 2020 election, it greatly expanded the privacy protections afforded to consumers. The new law also increased the data security obligations of companies operating in the state. The consumer rights protected by the CPRA are important because they address the kind of digital privacy concerns that are prevalent at a time when businesses have access to an unprecedented amount of personal information about customers. When a company violates the CPRA by failing to protect consumer data, they may be subject to substantial fines and exposed to civil liability.

To learn more about how the California Privacy Rights Act protects consumer privacy rights, keep reading.

What Consumer Privacy Rights Are Protected by the CPRA?

The California Privacy Rights Act (CPRA) was intended to strengthen consumer privacy laws already in effect, such as the California Consumer Privacy Act (CCPA). The idea was to protect California residents against invasions of privacy and data breaches when making purchases from businesses or when communicating with businesses online. The statute does this by strengthening consumer rights that existed under the CCPA and by creating new rights that did not previously exist.

These are the existing consumer rights that the CPRA strengthened:

  1. The right to know about any personal data that has been collected by companies.
  2. The right to delete any personal data that has been collected.
  3. The right to opt out of the sale or sharing of personal data with third parties.
  4. The right to be free from discrimination or retaliation for having exercised any of these consumer rights.
  5. The right to bring a private civil action against companies that fail to protect consumers’ personal information against unauthorized access or data breaches.

Additionally, the CPRA created two (2) entirely new consumer privacy rights:

  1. The right to correct personal information that is inaccurate.
  2. The right to limit how “sensitive personal information” is collected, used, and disclosed.

Consumer Right to Correct Inaccurate Personal Data

Under the CPRA, consumers now have the right to request that a business correct any collected information that is inaccurate. Moreover, this right must be disclosed to consumers in a company or website privacy notice. After a consumer has requested that certain information be corrected, the company must use “commercially reasonable efforts” to make the correction.

Consumer Right to Opt Out of Sharing Personal Data

Data privacy was a major focus of lawmakers when the California Consumer Privacy Act (CCPA) was enacted, but the statute may not have gone far enough. While the CCPA gives consumers the right to opt out of the sale of their personal information to third parties, the CPRA gives consumers the same right with respect to the sharing of personal information. Significantly, this consumer privacy right may be exercised regardless of whether the data is being shared for a monetary benefit.

It should also be noted that the data privacy law requires businesses to inform consumers of this right directly on the company website’s homepage. The business must include a conspicuous link with the title “Do Not Sell or Share My Personal Information,” which the consumer can click on to exercise their opt-out right.

New Obligations for Businesses Under the California Privacy Rights Act

The California Privacy Rights Act (CPRA) also increased requirements on businesses to protect the sensitive personal information of consumers against data breaches or other invasions of privacy. For example, businesses are now prohibited from maintaining customers’ personal data for any longer than absolutely necessary.

The CPRA also increased the penalties that companies can face for consumer privacy violations. The statutory fines start at $2,000 for each violation, and they can go as high as $7,500 for a willful violation. Beyond that, the maximum fines can be tripled when the violation involves a child under the age of 16. If a company wants to collect the personal data of consumers under 16 years of age, the young consumer must expressly consent to it. If the consumer is under the age of 13, a parent or guardian must first provide permission before a company can collect personal data.

Additionally, civil penalties may be imposed when the violation involves the theft of customer login information. This means that businesses that expose customer data to a data breach are subject to a lawsuit with significant damages.

Tauler Smith LLP Protects Consumer Privacy Rights in California. Call Us Today.

California law places clear limits on how businesses may use customer information collected during a transaction or website visit. The Los Angeles consumer privacy attorneys at Tauler Smith LLP understand the law and how it protects consumers against unlawful invasion of privacy. We represent plaintiffs in both individual lawsuits and class action lawsuits when a company illegally monitors, collects, shares, or sells a customer’s personal data without permission.

Call 310-590-3927 or send an email to talk to one of our skilled attorneys and explore your legal options.

California Privacy Protection Agency

California Privacy Protection Agency

California Privacy Protection Agency

The California Privacy Protection Agency (CPPA) is a new state agency tasked with enforcing consumer privacy laws, including the California Privacy Rights Act (CPRA). The CPRA explicitly protects individuals’ data privacy rights by both strengthening existing laws like the California Consumer Privacy Act (CCPA) and creating new consumer rights. For example, the CPRA gives consumers the right to correct personal information that is inaccurate, or even to request deletion of the data. The CPRA also requires companies to safeguard customers’ personal information against data breaches. These statutory requirements are strictly regulated and enforced by the CPPA: when a company violates the statute, the CPPA may impose substantial fines.

To learn more about the California Privacy Protection Agency, continue reading.

What Is the California Privacy Protection Agency?

The California Privacy Rights Act (CPRA) amended the California Consumer Privacy Act (CCPA), which provides explicit protections for California residents who share personal information with businesses. Prior to the CPRA becoming law, the California attorney general had rulemaking and enforcement authority with respect to consumer privacy regulations. After the CPRA passed, the California Privacy Protection Agency became the main state agency with authority to enforce these laws.

The California Privacy Protection Agency has a board comprised of five (5) members. The California Governor appoints two board members, including the Chair. Each of the three remaining board seats are appointed by the Attorney General, the Senate Rules Committee, and the Speaker of the Assembly. Each board member will serve in their position for up to eight (8) years before being replaced.

The California Privacy Protection Agency Enforces the CPRA

The main task of the California Privacy Protection Agency is to enforce the state’s consumer privacy laws. If the agency determines that a company has violated the CPRA or another consumer privacy law, they can enforce the statute and impose monetary penalties. Businesses that do not comply with the strict regulations of the CPRA will be subject to severe penalties: a $2,000 fine for each violation, a $2,500 fine when the violation is negligent, and a $7,500 fine when the violation is willful.

The CPRA also allows the state to impose enhanced penalties when digital privacy violations involve minors. If a company unlawfully sells or shares the personal information of a child under the age of 16, they may be fined another $7,500 for each violation. Importantly, the statute imposes strict liability in these instances. This means that the penalties may be imposed regardless of whether the offending company had actual knowledge of the child’s age. The CPRA penalties for consumer privacy violations involving a minor may be imposed on top of any penalties that may apply for violations of the Children’s Only Privacy Protection Act (COPPA).

Consumers May File Civil Suits for Data Privacy Breaches

Data security is a major focus of California’s consumer privacy laws. In cases involving a data breach that exposed a customer’s personal information, the CCPA and the CPRA give victims a private right of action. This means that you may be able to bring a civil lawsuit against the offending company and seek statutory damages. The CPRA states that consumers are eligible to pursue up to $750 for each privacy violation, or they may pursue actual damages – whichever amount is greater.

Call the Los Angeles Consumer Protection Lawyers at Tauler Smith LLP

The California Privacy Protection Agency is tasked with enforcing the CPRA, which means that companies that violate the statute can be fined. But victims of an invasion of privacy – such as a data breach that exposed their personal information – can also take legal action by bringing a CPRA claim in state court. The experienced Los Angeles consumer privacy lawyers at Tauler Smith LLP are ready to represent you in a civil suit because we routinely assist plaintiffs in consumer protection lawsuits throughout California.

Call 310-590-3927 or email us to schedule a free initial consultation.


Differences Between CPRA and CCPA


The California Privacy Rights Act (CPRA) passed as a ballot initiative in the 2020 general election. The new consumer privacy law is actually an amendment of an earlier law: the California Consumer Privacy Act (CCPA). The major differences between the CPRA and the CCPA involve the level of protection afforded to consumers. The CCPA established a baseline for protecting consumer privacy rights, while the CPRA significantly expands on those protections by giving consumers additional rights. The CPRA also imposes additional obligations on companies that do business in California.

To learn more about the differences between the CPRA and the CCPA, keep reading this blog.

California Laws That Protect Consumer Privacy

The two main California laws that protect consumers against invasion of privacy are the California Consumer Privacy Act (CCPA) and the California Privacy Rights Act (CPRA). The CPRA amended the CCPA.

California Consumer Privacy Act (CCPA)

The California Consumer Privacy Act (CCPA) was passed by state lawmakers in 2018. It was the first state privacy law that addressed the collection of consumer data, as well as the first law to directly confront digital privacy concerns. After the CCPA went into effect, businesses could no longer monitor customer communications and use the data without authorization. Additionally, California consumers now had some control over whether their personal information was collected by companies and, if so, how it could be used.

California Privacy Rights Act (CPRA)

The California Privacy Rights Act (CPRA) applies to any company that solicits customers in California and collects their personal information. The data privacy law gives consumers more control over their personal data by placing restrictions on how businesses can use customer information. When a consumer shares personal information with a business, there are limits on what the business may do with that data.

What Are the Differences Between the CPRA and the CCPA?

There are a number of differences between the California Privacy Rights Act (CPRA) and the California Consumer Privacy Act (CCPA). The CPRA created new rights for consumers and imposed stricter requirements on businesses that collect customer data. Additionally, the CPRA created a new state agency to enforce consumer privacy laws.

New Consumer Privacy Rights

The CCPA was enacted to protect customer privacy, and those protections were broadened in the CPRA so that additional types of personal information are also protected by law. This includes usernames, email addresses, passwords, and security questions. If a company fails to protect against breaches or unauthorized disclosures of this information, they may be subject to liability under the new statute.

One specific example of the additional rights that the CPRA provides to consumers is the ability to opt out of cross-context behavioral advertising. This is defined as targeted advertising that is based on the personal information collected when consumers visit certain websites or use online platforms like Google, Facebook, Instagram, etc. The CPRA explicitly states that companies must allow consumers to opt out when personal data is shared with other companies for the purpose of cross-contextual advertising.

Restrictions on Businesses

The CPRA established broad privacy requirements for businesses, including an obligation for businesses to only collect and use personal information when it is reasonably necessary and proportionate to their stated purposes for collecting or using the information in the first place. Moreover, the CPRA requires companies to specify exactly how long they plan to retain personal data collected from consumers.

California Privacy Protection Agency

The CPRA established the framework for a new state enforcement agency: the California Privacy Protection Agency. This agency is responsible for enforcing not just the CPRA, but all of California’s consumer privacy laws and regulations. Prior to passage of the CPRA, enforcement of those laws was left up to the California Attorney General.

Contact the California Consumer Protection Lawyers at Tauler Smith LLP

If you visited a website and shared your personal information with the company or website operator, it’s possible that your data was exposed. The Los Angeles consumer protection lawyers at Tauler Smith LLP can help you take legal action under the California Privacy Rights Act and receive financial compensation. We regularly represent plaintiffs in both state and federal courts. To find out if you might be eligible to bring a CPRA claim, call 310-590-3927 or email us today.

California Privacy Rights Act

California Privacy Rights Act (CPRA)

California Privacy Rights ActConsumer protection has been of paramount importance to both lawmakers and residents in California for a long time, resulting in extremely strong laws that limit what companies can do with customer data and personal information. One of these laws addressing digital privacy concerns is the California Privacy Rights Act (CPRA), a new consumer privacy law that recently went into effect. The data protection law was passed by California residents through a referendum on the ballot in the 2020 general election. The CPRA was intended to be the most comprehensive consumer privacy legislation in the United States. Along with the California Consumer Privacy Act (CCPA), the CPRA set the standard for government protection of data privacy rights.

To learn more about the California Privacy Rights Act and how it affects both consumers and businesses, keep reading.

Who Does the CPRA Apply to?

Any for-profit company that does business in the state of California and that has significant gross annual revenues is subject to the regulations of the California Privacy Rights Act (CPRA). Additionally, if a company solicits customers in California and collects their personal information at any point, the company may be required to comply with the statute.

The CPRA can also apply to third parties that have been given access to a consumer’s personal data. If a company shared your information with a third party and you subsequently requested that the information be corrected or deleted, the company must pass on the request to the third party. The same is true for service providers and contractors: a company that shares customers’ personal information with these individuals and/or entities must instruct them about the CPRA requirements, and any violations by these other parties could expose the company to liability.

Additionally, the CPRA doesn’t apply only to consumers. CPRA protections also apply to employees who work for companies that monitor and use their data.

What Is the California Privacy Rights Act?

The California Consumer Privacy Act (CCPA) was the first state privacy law. The California Privacy Rights Act (CPRA) amended the CCPA and made California’s privacy laws even more consumer friendly. At the same time, the CPRA also strengthened existing protections for consumers by requiring businesses to comply with much stricter consumer privacy regulations.

New Obligations for Businesses Under the CPRA

The California Privacy Rights Act (CPRA) imposed further obligations on companies that do business in California and collect personal information from customers. For example, the CPRA created new compliance rules for businesses. This includes the elimination of a previous rule that gave companies 30 days to “cure” any violations of the CCPA. Now, any company that violates the CPRA is subject to monetary penalties under the statute.

Additionally, under the CPRA, companies must take affirmative steps to protect customers’ personal information against data breaches. This means that companies must implement reasonable security measures to ensure that personal data is not illegally accessed by others.

Businesses are also required to perform annual cybersecurity audits to confirm that no breaches have occurred. Businesses must submit the results of these audits to the California Privacy Protection Agency, in addition to conducting regular risk assessments that weigh the benefits of collecting consumer information against the security risks.

CPRA Created New Consumer Privacy Rights

The CPRA formally created a number of new privacy rights for California consumers, including the following:

  • Consumers can opt out of sharing their personal information with businesses.
  • Consumers can opt out of allowing businesses to use their “sensitive personal information.” This includes the customer’s Social Security number, driver’s license, state ID card, passport, credit card or debit card, bank account, geolocation data, and emails or text messages. It can also include information about the customer’s racial or ethnic origin, religion, genetic data, health data, and sexual orientation.
  • Consumers have the right to correct any personal data that is inaccurate. This means that businesses must provide customers with a means to review and then correct wrong information.
  • Consumers can legally access information about how the company is storing and using their data, as well as the data retention period.

What Types of Data Are Protected by the CPRA?

Basically, the California Privacy Rights Act (CPRA) protects any information that could be used to identify an individual. This includes things like the person’s name, email address, Social Security number, driver’s license number, state ID card, passport number, bank account or other financial account numbers, credit card or debit card numbers, and physical address.

When a company collects this type of information from a consumer, the consumer has a legal right to be notified. Moreover, once notified, the consumer has the legal right to demand that the information be corrected or deleted.

Sensitive Personal Information Protected by the CPRA

Data security is paramount in an age when information can be misused so easily. That’s why the CPRA places even stricter requirements on companies that collect consumer data deemed to be “sensitive personal information.”

What Is “Sensitive Personal Information”?

The California Privacy Rights Act (CPRA) defines a consumer’s “sensitive personal information” as including any of the following:

  • Social Security number, driver’s licenses, state ID card, or passport.
  • Website or app log-in information.
  • Bank accounts, credit cards, debit cards.
  • Geolocation data that identifies the consumer’s location.
  • Race, ethnicity, or religion.
  • Sexual orientation.
  • Email or text messages.
  • Genetic data.

The CPRA can also be updated by lawmakers in the future to add more categories that would qualify for protection as sensitive personal information. This definitional flexibility is codified in the statute to “address changes in technology, data collection practices, obstacles to implementation, and privacy concerns.”

How Sensitive Personal Information May Be Used

The CPRA places limitations on how businesses may use customers’ sensitive personal information. A business can only use this type of information to the extent necessary to perform services or provide goods reasonably expected by the consumer. Any use beyond this scope violates the statute.

Disclosures About Sensitive Personal Information

The statute stipulates that businesses must provide clear disclosures about the fact that they are collecting this type of information, as well as disclosures about how the information will be used. For example, a business should create a link on its company website that informs consumers of the collection practices and that gives them the ability to opt out of the collection and/or sharing of their data.

The California Privacy Protection Agency Is Tasked with Enforcing the CPRA

Section 24 of the CPRA created the California Privacy Protection Agency (CPPA), a state agency that implements and enforces the consumer privacy law. The CPPA receives reports of privacy law violations and then conducts investigations to determine whether companies should be penalized under the statute.

The CPPA is not the only state agency that oversees and enforces the CPRA. The California Department of Justice is also heavily involved in enforcing the law and ensuring that consumer privacy rights are protected.

What Are the Penalties for Violations of the CPRA?

The CPRA imposed substantial monetary penalties for noncompliance by companies. These penalties include a fine of $2,000 for each violation.

The penalties may be increased in certain circumstances:

  • $2,500 for each negligent violation of the statute.
  • $7,500 for each willful violation of the statute.

Civil Suits Filed Under the CPRA

The original consumer privacy law, the California Consumer Privacy Act (CCPA), gave consumers whose personal data was compromised a private right of action to bring a civil suit against the company that failed to prevent the data breach and protect consumers against invasions of privacy. But there were limitations on what exactly qualified as a “data breach” under the old statute. Under the new customer privacy regulations of the California Privacy Rights Act (CPRA), the types of data breaches that may expose a company to civil liability are greatly expanded: if a business fails to protect customer information such as an email address, username, password, or security question, the business could be sued by the victim.

Contact the Los Angeles Consumer Protection Lawyers at Tauler Smith LLP

Are you a California resident? Did you visit a website that collected your personal information without authorization? Was your personal information exposed in a data breach? You may be eligible to recover statutory damages under the California Privacy Rights Act (CPRA). The experienced Los Angeles consumer protection attorneys at Tauler Smith LLP can help you file a complaint with the CPRA and possibly file a civil lawsuit for financial compensation.

Call us today at 310-590-3927 or send an email to schedule a free consultation.

FTC Rule on Automatic Renewals

FTC Rule Proposal on Automatic Renewals

FTC Rule on Automatic Renewals

The Federal Trade Commission (FTC) may soon pass new rules that strengthen federal protections for consumers who purchase products or services that are automatically renewed. The FTC rule proposal on automatic renewals would impose strict requirements on companies that offer automatic renewal subscriptions, or negative options, to consumers. Federal statutes and rules typically refer to automatic renewals as “negative options” because the absence of any affirmative action by the customer is enough to justify the auto-renewal. In other words, silence or inaction by the consumer is construed as acceptance of the auto-renewal contract. The amended FTC rule would make it easier for consumers to cancel their auto-renewal subscriptions, and it would impose civil penalties on companies that violate federal law.

For more information about the proposed amendments to the FTC Rule on Automatic Renewals, keep reading this blog.

What Is the Federal Law on Automatic Renewals?

California consumer protection lawyers are familiar with California’s Automatic Renewal Law (ARL), which regulates businesses that offer auto-renewing subscriptions to consumers in the state. The federal analogue to the ARL is the Negative Option Rule, which has been in effect in every state for 50 years. The Negative Option Rule is enforced through Section 5 of the FTC Act. In this context, automatic renewals are called “negative options” because sellers are allowed to interpret a customer’s silence as implied acceptance of an auto-renewal offer.

There are some major limitations on the Negative Option Rule. For example, the federal law only regulates prenotification plans. This means that the law only applies to companies that attach auto renewals to customer agreements before the sale of products or services.

FTC Proposes Amendment to the Federal Rule on Automatic Renewals

The FTC has proposed amendments to the federal Automatic Renewal Law. The suggested changes to federal law would have a significant effect on many state laws, especially in states that do not already regulate auto-renewal subscriptions. Some of the specific regulations that would be modified or added to federal law under the rule change include:

  • Mandatory upfront disclosures of auto-renewal plans.
  • Penalties for company misrepresentations about auto-renewal plans.
  • Obtaining consumer consent for enrolling in auto-renewal plans.
  • Annual reminders about automatic renewals.
  • Easier cancellation of auto-renewal plans.

Ultimately, the FTC will decide whether to approve or decline the proposed rule changes. The federal agency might also decide to make revisions and then open up the new amendment for public comments.

Auto-Renewal Disclosures

One of the biggest changes being proposed for federal law is to require businesses to disclose any auto-renewal terms in a way that ensures that customers will see the terms. The current federal law stipulates that businesses must place auto-renewal terms in “visual proximity” to a request for consent. By contrast, the new rules would require these disclosures to be “immediately adjacent,” or right next to, any text about customer consent so that the disclosures are easily noticeable or difficult to miss. In other words, companies won’t be able to hide the auto-renewal consent text.

Additionally, the proposed FTC rule calls for companies to disclose particular information before customers can legally consent to an automatic renewal plan:

  • Will payments be recurring?
  • What is the cost of the subscription, including the auto-renewals?
  • When will the subscription first automatically renew, and on what dates or at what intervals thereafter?
  • What is the deadline to cancel the subscription before it automatically renews?
  • What is the process for canceling the subscription?

The amended FTC rules would require companies to provide this information for all types of transactions involving recurring contracts, not just those occurring online. That’s because the rules would apply to offers made on the internet, in print publications and advertisements, during telephone solicitations, and in person at brick-and-mortar retail stores.

Misrepresentations About Auto-Renewal Plans

California consumer fraud lawyers will tell you that the state’s false advertising laws impose severe restrictions on the sales practices of companies that do business in the state. Companies that violate these laws may be subject to both civil liability and criminal penalties for egregious conduct. The proposed FTC rules would go a long way toward catching up with California’s regulations of companies that offer auto-renewal plans by applying federal regulations to misrepresentations about the entire sale agreement. For instance, the federal law would explicitly bar companies from misrepresenting a material fact related to any part of a transaction involving an automatically renewing subscription, even if the misrepresentation has nothing to do with the auto-renewal.

Consumer Consent for Auto-Renewals

The proposed changes to FTC rules would include a requirement that companies obtain affirmative consent from consumers before an auto-renewal contract becomes legally binding. Importantly, the customer’s consent for auto-renewal terms would have to be separate and apart from their consent for the transaction or purchase itself. For example, the business would not be able to hide the auto-renewal agreement or otherwise confuse the customer into thinking that they are only agreeing to the original purchase. As set forth by the recommended FTC rules, the request for affirmative consent from the consumer for the auto-renewal subscription would likely have to be a “check box, signature, or other substantially similar method.”

Additionally, companies will need to maintain a record of the customer-provided consent for a period of at least three (3) years from the date on which the subscription was first approved, or for one (1) year after the subscription has been cancelled.

Annual Reminders About Auto-Renewals

The FTC rule amendment under consideration would require companies to send annual reminders to customers about any auto-renewing subscriptions that involve products or services other than physical goods. The reminder must be sent annually even if it is not a yearly subscription plan. Additionally, these annual reminders would need to be in plain language that clearly identifies the product subscription or service being renewed, the dollar amount of the subscription, the frequency of the renewals, and the process for cancelling the subscription. The reminder would also have to be sent to the consumer in the same manner that they initially provided consent for the auto-renewal plan.

Cancellation of Auto-Renewals

The FTC rule changes would also require businesses to make it easy for customers to immediately cancel their auto-renewal subscriptions. For example, the cancellation option must use simple and easy-to-understand terms. The customer must also be given the ability to cancel through the same method they used to make the initial purchase, meaning that an online purchase could be cancelled on the company’s website.

Another requirement under consideration by the FTC is that companies would not be able to make any additional offers when a customer is attempting to cancel their auto-renewal subscription. These types of offers are known as “save attempts” because they tend to involve the business trying to save the auto-renewal subscription from cancellation. The idea here is that businesses should not be allowed to confuse customers with unclear terms or modifications that might dissuade them from cancelling their subscription.

FTC Rule on Auto-Renewals Regulates Business-to-Business Contracts

The California Automatic Renewal Law (ARL) is considered by many to be the strongest such law in the country, imposing requirements on businesses that go far beyond anything in current federal laws. In at least one way, however, the proposed FTC rule would actually go further than California’s ARL. That’s because the federal law would apply to both consumer transactions and business-to-business transactions.

FTC Enforcement of Federal Auto-Renewal Laws

Amendments to the federal law on automatic renewals would greatly strengthen the ability of the Federal Trade Commission (FTC) to enforce the law and crack down on violators. The FTC proposal would allow the government to seek restitution on behalf of consumers, as well as imposing civil penalties against companies that violate the law.

The federal law does not provide a civil remedy for individual consumers, but they can still seek financial compensation by filing a lawsuit based on state laws like the California Automatic Renewal Law (ARL). The federal law on auto renewals may also make it easier for consumers to file class action lawsuits under state law.

California’s Law on Automatic Renewal Offers

Companies that do business in California must follow stringent requirements when it comes to subscription renewals, including pre-transaction disclosures, affirmative consent, renewal notices, and cancellation policies. The purpose of the California Automatic Renewal Law (ARL) is to end the practice of ongoing charging of consumer credit cards without consumers’ explicit consent.

Some of the specific requirements that the California ARL imposes on companies include the following:

  • Cancellations: Customers must be permitted to cancel their subscriptions online if they initially signed up online. Additionally, the cancellation process must be easy, with no steps that might obstruct or delay the process.
  • Long-term subscriptions: If the subscription is for a period of at least one year before the initial renewal, businesses must send renewal notices to customers to ensure that they are informed. This notice needs to be sent at least 15 days before the subscription is scheduled to be renewed.
  • Free gifts or promotions: If there was a free gift, trial subscription, or promotional discount involved, the company must send a notice of renewal to the customer before the trial period is over.

Call the California Consumer Fraud Attorneys at Tauler Smith LLP

The California consumer fraud attorneys at Tauler Smith LLP represent plaintiffs in civil suits filed in both state and federal courtrooms throughout the country. If you were charged for an automatically renewing subscription that you did not authorize, we can help you pursue restitution and monetary damages. Call 310-590-3927 or email us to discuss your case.

Federal Law on Automatic Renewals

Federal Law on Automatic Renewals

Federal Law on Automatic Renewals

Federal law on automatic renewals has gotten stronger and more far-reaching in recent years. This has come in response to states like California that have started to take the lead when it comes to protecting consumers against deceptive advertising and business fraud. There are several prominent laws at both the California state level and the federal level that govern retail subscription programs and automatic renewal programs, including the FTC Rule on Automatic Renewals. Additionally, both state and federal agencies have begun increasing their enforcement of these laws in recent years. For example, the California Automatic Renewal Task Force (CART) makes sure that businesses comply with California’s Automatic Renewal Law (ARL), while the Consumer Financial Protection Bureau (CFPB) is actively enforcing federal laws regulating negative options and recurring contracts. Before contacting federal or state agencies, consumers who have been billed without consent for an auto-renewal subscription should speak with a qualified consumer protection attorney.

To learn more about the federal law on automatic renewal subscriptions, keep reading this blog.

What Is the Federal Trade Commission Rule on Auto-Renewals?

Companies that do business in California while offering automatic renewal and subscription programs must comply with applicable state and federal laws, including the California Automatic Renewal Law (ARL). In fact, California has served as a model for automatic renewal legislation passed by other states, as well as federal statutes and rules that govern auto-renewals.

Federal law uses slightly different terminology for automatic renewal subscriptions: they are instead referred to as “negative option plans.” Basically, a negative option plan is one that is automatically renewed if the consumer fails to take any kind of affirmative action to cancel or not renew it.

The California false advertising lawyers at Tauler Smith LLP represent plaintiffs in civil litigation both individually and as members of class action lawsuits. We also regularly appear in both state and federal courts, so we are very familiar with the relevant consumer protection laws.

How Is the Federal Automatic Renewal Law Enforced?

The Federal Trade Commission (FTC) enforces federal law on automatic renewals and the Negative Option Rule. Federal guidelines for automatic renewals tend to focus on up-front disclosures from businesses, informed consent from customers, and uncomplicated cancellation procedures.

In addition to the FTC, the Consumer Financial Protection Bureau (CFPB) is also involved in enforcement of federal laws concerning automatic renewal and subscription practices.

Proposed Amendment to FTC Rule on Automatic Renewals

The FTC proposed an amendment to the agency rule on automatic renewals that could have a serious impact on how companies do business in California and other states. When the FTC asked for public input on auto-renewal policies, the response was overwhelming: the federal agency received thousands of comments from consumers who complained that businesses were deceptively renewing subscriptions without consent.

Some pro-business organizations like the U.S. Chamber of Commerce have objected to the FTC’s proposed rules for auto renewal subscription services, which the group says would “impose substantial and burdensome regulations on the business community.” But similar consumer fraud regulations already exist in California: statutes like the Automatic Renewal Law (ARL), the Consumers Legal Remedies Act (CLRA), and the Unfair Competition Law (UCL) all provide strong protections for consumers against companies that do business in the state.

If the FTC rule change is approved and goes into effect, it will certainly affect businesses that offer automatic renewal plans in California and other states. That’s because federal law would allow for the imposition of civil penalties of up to $50,000 for each violation of the law.

Other Federal Laws Regulating Automatic Renewals: ROSCA and TSR

The Federal Trade Commission rule on negative options is the main federal law that governs automatic renewal offers by companies. In addition to the FTC rule, there are a couple of other federal statutes that also apply to automatic renewals:

  • The Restore Online Shoppers’ Confidence Act (ROSCA)
  • The Telemarketing Sales Rule (TSR)

Restore Online Shoppers’ Confidence Act (ROSCA)

Under federal law, there are disclosure requirements for auto-renewal terms when a customer signs up for a subscription online. The Restore Online Shoppers’ Confidence Act (ROSCA) requires companies to clearly and conspicuously disclose “all material terms of the transaction” prior to obtaining the customer’s billing information. ROSCA also imposes on businesses a requirement to obtain express informed consent for an auto-renewal plan before getting customers’ billing information.

Unfortunately for consumers, ROSCA has limited application to auto-renewal plans because it only applies to online purchases.

Telemarketing Sales Rule (TSR)

Another important federal law governing automatic renewals is the Telemarketing Sales Rule (TSR). The TSR requires certain disclosures when a telemarketer offers a product or service that includes an automatic renewal subscription, such as the material terms and conditions of the purchase.

State Laws: What Is the California Law on Automatic Renewals of Subscriptions?

California’s Automatic Renewal Law (ARL) goes even further than federal law by explicitly prohibiting companies from auto-renewing subscriptions without first obtaining affirmative consent from the subscriber. That type of consent can only be given when the customer is aware of what exactly they are agreeing to, so this means companies must “clearly and conspicuously” disclose the subscription terms, including the price of the service, length of the subscription, and any recurring charges. Clear and conspicuous disclosure can be achieved by using all-caps, highlighted text, colored text, boldface font, and anything else that might contrast or differentiate an auto-subscription from other terms or conditions.

Canceling Subscriptions Under California’s ARL

The California Auto Renewal Task Force (CART) is a group of district attorneys in Los Angeles County, San Diego County, Santa Barbara County, Santa Clara County, and Santa Cruz County who enforce the ARL against companies that mislead and deceive California consumers with confusing subscription policies that automatically renew without authorization and that can be difficult to cancel afterwards.

Doug Allen, an assistant district attorney with the Santa Cruz County District Attorney’s Office and also a member of CART, says that the ARL is specifically designed “to make it as easy to get out of [an auto-renewal subscription] as it was to get into it.” The ARL stipulates that businesses must provide full disclosure to customers about the terms and conditions of all subscription renewal plans, including automatic renewals. Additionally, the ARL requires businesses to make it easy for customers to cancel a subscription on the backend.

Most Common Violations of the California ARL

Some of the most egregious violations of the California Automatic Renewal Law (ARL) involve companies that intentionally make it tough for a customer to cancel by bouncing the customer around when they call or email. For example, a retailer might inform the customer that they will need to speak to a “supervisor” who is conveniently never available. This is done with the full intention of ensuring that the customer remains enrolled in the subscription program. When a customer tries to cancel on the company’s website, the site needs to be easy to navigate and the cancellation process needs to be simple. The ARL also prohibits businesses from attempting to drag out the cancellation with an online survey; any surveys must be provided after the cancellation is complete.

Contact the California Consumer Protection Lawyers at Tauler Smith LLP

Tauler Smith LLP is a law firm that handles consumer fraud litigation in both state and federal courts across the United States. Our consumer protection lawyers have extensive experience representing plaintiffs in these matters, so we understand the nuances of automatic renewal laws that may apply in your particular case. If you were billed for a monthly subscription contract that was automatically renewed without your consent, we can assist you. Call or email us now to schedule a free initial consultation.

Nationwide Mutual Insurance CIPA Lawsuit

CIPA Lawsuit Against Nationwide Mutual Insurance

Nationwide Mutual Insurance CIPA Lawsuit

A CIPA lawsuit was recently filed against Nationwide Mutual Insurance for illegal wiretapping and invasion of privacy, and now a federal judge in California has ruled that the case can proceed to trial. The U.S. District Court judge issued the ruling in response to a motion to dismiss the wiretapping claims under Section 631 of CIPA, or the California Invasion of Privacy Act. The civil suit alleges that Nationwide Mutual unlawfully allows a third party to eavesdrop on customer conversations on the insurance company’s website. Chat communications are allegedly monitored in real time, and the sensitive personal data from those conversations is allegedly stored and used for financial gain. These actions would constitute clear violations of California consumer privacy laws.

These days, it is common for many different types of businesses to violate the CIPA and other invasion of privacy laws. If you live in California and used the chat feature on a company’s website, you may be eligible to join a class action lawsuit for invasion of privacy. The Los Angeles consumer protection lawyers at Tauler Smith LLP can help you get financial compensation.

Nationwide Mutual Insurance Sued for Invasion of Privacy

The defendant in the recent invasion of privacy case is Nationwide Mutual Insurance Co., which is a corporation that offers insurance, retirement, investing, and other financial services and products to consumers in the United States, including residents of California. Nationwide operates a website: www.nationwide.com. The website has a chat feature, which customers can use to have online conversations with Nationwide. Sometimes, the customers who use the chat feature may share sensitive personal data with the company.

Third-Party Wiretapping of Customer Conversations

Nationwide Mutual Insurance has been accused of using a third-party company, Akamai or Kustomer, to embed code into the Nationwide website, which allows the third-party company to monitor and store transcripts of the conversations that occur through the chat feature. Akamai specializes in harvesting data from consumer conversations, which is believed to be the reason that Nationwide contracted with them in the first place.

Significantly, Nationwide does not inform customers who use the chat feature on the website that monitoring of conversations, storing of transcripts, or data harvesting occurs. Beyond that, Nationwide does not obtain customers’ consent for any of these activities.

Federal Judge Denies Motion to Dismiss Wiretapping Lawsuit Against Nationwide Mutual Insurance

The plaintiff in the consumer data privacy case is a California resident who used a smartphone to visit the Nationwide Mutual Insurance website and to communicate with Nationwide via the company’s website chat program. She filed her original legal complaint in Los Angeles County Superior Court, and the case was later removed to the U.S. District Court for the Central District of California.

Once the case arrived in federal court, Nationwide filed a motion to dismiss the complaint. The U.S. District Court recently held a hearing on the motion to dismiss. Although the Section 632.7 CIPA complaint was dismissed, the court ruled that the Section 631 CIPA complaint could move forward to trial. The court found that the plaintiff had stated a valid claim under § 631 of the CIPA because she plausibly alleged that Nationwide aided third-party Akamai in violating the consumer privacy statute.

What Are California’s Data Privacy Laws?

On top of having extremely strong consumer protection laws, California also has some of the strongest digital privacy laws in the country. The three most prominent statutes are the California Invasion of Privacy Act (CIPA), the California Consumer Privacy Act (CCPA), and the California Privacy Rights Act (CPRA). All of these data protection laws impose civil liability on companies that invade the privacy of customers. The CIPA imposes a requirement on businesses to obtain permission from customers before recording telephone and internet communications, including online chat conversations. The CCPA specifically prohibits businesses from sharing the personal information of customers with third parties, while the CPRA amended the law to increase the penalties for violating consumer privacy.

What Conduct Is Prohibited by the California Invasion of Privacy Act?

Although Section 631 of the California Invasion of Privacy Act (CIPA) is technically a criminal statute with criminal penalties, the Penal Code authorizes civil liability for violations of the law. This means that consumers whose confidentiality was invaded by a company doing business in California can potentially bring a civil lawsuit for monetary damages.

California courts ruling on CIPA claims have interpreted Section 631 to prohibit three types of conduct:

  1. Intentional wiretapping.
  2. Attempting to learn the contents of a communication in transit over a wire.
  3. Attempting to use information obtained as a result of wiretapping or monitoring of communications.

Additional requirements or elements of a CIPA violation include that the intentional wiretapping was done while the communication was in transit and that the communication was being sent from or received at a location within California. The prohibited conduct includes reading the contents of any message, report, or communication without the consent of all parties to that message, report, or communication. If one of the parties did not know that the chat or other type of communication was being monitored and/or wiretapped, then it would not be possible for them to provide consent or authorization. The bottom line is that eavesdropping on a conversation is a clear violation of Section 631 of the CIPA.

“Aiding” a Violation of the CIPA

Section 631 of the California Invasion of Privacy Act (CIPA) also imposes liability on any company that “aids” or assists another in violating the statute. The plaintiff in this case alleges that Nationwide Mutual Insurance “aided, abetted, and even paid third parties to eavesdrop” on her conversations. Moreover, she alleges that these privacy breaches happened not only with her communications, but also with other consumers’ communications on the Nationwide website.

Party Exception to § 631

There is a “party exception” to Section 631 of the CIPA. Courts have found that a party to a conversation cannot be liable for “eavesdropping” on that conversation. But this gets complicated when the conversation involves a third party. For example, if computer code on a website automatically directs a communication to a third party, the party exception won’t shield the third party from civil liability under the CIPA.

U.S. District Court: Nationwide Mutual Insurance May Have Violated California Invasion of Privacy Law

The plaintiff in the Nationwide Mutual Insurance data privacy case alleged that Nationwide violated the California Invasion of Privacy Act (CIPA) pursuant to California Penal Code § 631. Now, the U.S. District Court for the Central District of California has found that the plaintiff plausibly alleged that Akamai read the contents of her messages, which would constitute a violation of Section 631 by Nationwide for “aiding” in the wiretapping offense. Moreover, the court agreed that it is conceivable that Nationwide hired Akamai specifically to intercept messages and use them for Nationwide’s financial benefit. This would constitute “aiding” the illegal wiretapping by Akamai, which would lead to Nationwide itself being liable for violating the CIPA.

One theory put forward in the case is that Nationwide paid Akamai to “embed code” into the website that “enables Akamai to secretly intercept in real time, eavesdrop upon, and store transcripts” of messages sent via the website chat feature. In fact, it has been alleged that Akamai’s business model is to harvest data from transcripts of communications. Significantly, the federal court said that one inference from the plaintiff’s legal claim is that the personal information being harvested goes beyond mere “record information” like the consumer’s name, address, and subscriber number.

Akamai has been accused of intercepting customers’ messages as they are sent and received on the Nationwide website. The court found that these allegations are “plausible” based on Akamai’s public statements about their conduct. Additionally, the court said that the plaintiff clearly alleged that neither Akamai nor Nationwide Mutual Insurance had her consent to harvest personal data from communications on the Nationwide website.

Contact the California Consumer Protection Lawyers at Tauler Smith LLP

Anyone who used the chat feature on a company’s website may have been the victim of illegal wiretapping and privacy violations. If you are a California resident who visited a website, the Tauler Smith LLP legal team can help you. Contact our Los Angeles consumer fraud and false advertising attorneys today. You can call 310-590-3927 or email us.

Textbook Company Chegg ARL Claim

Tauler Smith Files ARL Claim Against Textbook Company Chegg

Textbook Company Chegg ARL Claim

Tauler Smith LLP filed an ARL claim against textbook company Chegg for allegedly renewing customer subscriptions without notice or authorization. KNTV, which serves as the NBC outlet for the San Francisco Bay Area, reported that the civil lawsuit was filed in federal court on behalf of a student who rented a book for her law school class. It is not uncommon for consumers who make what they thought was a one-time purchase online to later realize that they have been charged again – and again! – for an auto-renewing subscription. The California Automatic Renewal Law (ARL) makes it illegal for companies like Chegg to engage in this kind of deception. The statute also gives consumers the ability to pursue damages of up to $2,500 for each ARL violation. California false advertising attorney Robert Tauler is leading the fight for consumers against companies that violate the rights of customers with deceptive auto-renewal policies.

Click here to view the NBC Bay Area News report on the latest lawsuit filed under California’s ARL. To learn more about the Automatic Renewal Law claims against Chegg, keep reading this blog.

NBC Bay Area News Investigates Automatic Renewal Law Claim Against Chegg

A recent report by KNTV, the Bay Area affiliate of NBC, details the battle being fought by consumers who learn that they were automatically enrolled in a Chegg subscription service without their permission. The KNTV investigative team learned that many of these consumers have also found it nearly impossible to cancel the subscription and to get a refund for the unauthorized charges.

The plaintiff in the case is Sheri Moyer, a law student who needed a textbook for one of her law school classes. That book would have cost her upwards of $120, so instead she rented a digital textbook for $19.99 from Santa Clara-based Chegg. What is Chegg? Chegg markets itself as an education technology company that offers online tutoring, textbook sales, and both digital and physical textbook rentals to students in a variety of fields.

Moyer only needed the law school course book to complete a short class assignment, so it made sense for her to rent it instead of buying it. She paid for a 30-day subscription on Chegg and finished her assignment. But she was shocked when she checked her credit card statement the following month to see that Chegg charged her for another 30-day subscription. It turned out that the textbook rental company had auto billed her without authorization. To make matters worse, Chegg refused to refund Moyer’s money because “they had a zero-refund policy.”

Tauler Smith LLP Files Consumer Protection Lawsuit Against Chegg

Sheri Moyer has enlisted the Los Angeles law firm Tauler Smith LLP to help her file a civil suit against Chegg in the U.S. District Court for the Northern District of California. Chegg contested the lawsuit by getting the case moved to arbitration. Moyer wanted the case to go to trial so that she would have an opportunity to tell her story to a jury, but a federal judge ruled that the parties must first present their arguments to an arbitrator. The judge also ruled that the parties will need to provide the court with regular updates on the arbitration process.

Tauler Smith LLP frequently represents plaintiffs in consumer fraud actions and automatic renewal lawsuits filed in California courts. For example, our legal team recently filed an ARL claim against a casting company accused of deceptively renewing customer subscriptions to their service.

Consumer Class Action Lawsuit: Chegg Accused of Automatically Renewing Subscriptions Without Permission

In the Chegg textbook rental case, Sheri Moyer is suing for reimbursement of fraudulent charges, as well as statutory damages. That’s because the ARL allows consumers to recover $2,500 for each violation of the auto-renewal statute.

More than anything, Moyer wants to make sure that the online textbook rental company is held accountable for their deceptive actions, which allegedly included failing to disclose their auto-renewal policy. Moyer’s attorney, consumer advocate Robert Tauler, filed the suit in the federal court in San Jose because he wants to establish legal precedent throughout the state and send a strong message to other companies that trick customers into auto-renewing subscriptions. Tauler believes this is an important business fraud case that warrants class action status, which is why he is asking other consumers who have been charged for automatically renewing subscriptions to come forward. By exercising their legal rights, they can help put a stop to the fraud being committed by many online retailers that do business in California. Consumers who join the class action lawsuit can also recover statutory damages of $2,500 for every ARL violation committed by the company.

Contact the California Consumer Protection Attorneys at Tauler Smith LLP

The California consumer protection lawyers at Tauler Smith LLP regularly appear in both state and federal courts on behalf of consumers who were fraudulently charged for automatically renewing subscriptions. Our legal team is currently looking for plaintiffs in a class action lawsuit against the educational support services company Chegg. If you signed up for a textbook subscription with Chegg or any other type of subscription with an online retailer, we can help you file a civil suit for financial compensation.

Call 310-590-3927 or send an email today.