When a customer uses the internet to sign up for a subscription service that automatically renews, there are rules that the subscription company needs to follow in order to comply with both federal and state consumer fraud laws. For example, the California Automatic Renewal Law (ARL) imposes disclosure requirements on businesses. The ARL also requires businesses to make it easy for consumers to cancel their subscriptions. An NBC Los Angeles News Report on California’s ARL details recent consumer lawsuits filed by Tauler Smith LLP against companies that have violated automatic subscription renewal laws.
KNBC Los Angeles Report on California Automatic Renewal Law Violations
Your automatic subscription renewal should be easy to cancel, but many aren’t, and it’s against the law. Companies are supposed to let you know how much they’ll charge you and when. If they don’t, you can take them to court and could be awarded $2,500.
Douglas Allen is an assistant district attorney in Santa Cruz County. He’s also a member of a state task force set up to enforce the automatic renewal law. “Frankly, we’ve seen some pretty egregious violations of the law,” he said. Allen said most companies comply with the law, but some make it especially difficult for customers to cancel their subscriptions. “There’s a lot of money to be made in the auto-renewing contracts. And the less savory companies expect to make their money because they deceive people into three or four auto-renewals before they realize what they’ve signed up for,” he said. In the past eight years, Allen said the task force has investigated 45 companies; 15 were found in violation of the law, resulting in $16 million in fines.
View the full report on the NBC Los Angeles website.