Companies that do business in California are legally required to disclose an automatic renewal policy to customers before auto-renewing their subscription. A recent NBC Bay Area News report on the California Automatic Renewal Law (ARL) details how Chegg, an education technology company, has been accused of deceptively renewing subscriptions to a textbook rental service and then making it difficult for customers to cancel the subscriptions. The plaintiff in the lawsuit is seeking $2,500 in damages, which is what the ARL allows the court to impose against companies that violate the statute.
The Los Angeles consumer fraud attorneys at Tauler Smith LLP are seeking additional plaintiffs to join a class action lawsuit for ARL violations by Chegg and other companies.
KNTV San Francisco Bay Area News: ARL Claim Against Textbook Company Chegg
Battling auto renewal? Can’t cancel? Can’t get a refund? You have rights!
In Washington, the Federal Trade Commission is currently looking to toughen federal rules that govern auto renewals – and give consumers more power. When the FTC asked for public comment this spring, it got more than a thousand of them. Some businesses and business groups bristled. For example, the U.S. Chamber of Commerce commented that the FTC was imposing “substantial and burdensome regulations on the business community.”
The federal auto-renew fight is just beginning. But it’s settled in California. A little-known law called the California “Auto Renewal Law” is already on the books. “The fundamental aspect of the law, the way it’s phrased and how it’s designed, is to make it as easy to get out of as it was to get into it,” said Doug Allen, Assistant District Attorney in the Santa Cruz County District Attorney’s Office.
“This isn’t the biggest case out there, but I think it’s an important case nonetheless,” said attorney Robert Tauler. He filed a federal suit in San Jose. Tauler argues Chegg did “not use bold, highlighted, all-capitalized, or different-colored text for the automatic renewal terms” when Sheri signed up. He’s asking the court to order Chegg to refund Sheri – plus any other auto-renewed customers like her. Tauler wants a class action – to set some precedent. “I’d like businesses to be on the lookout that they should comply – whether they are large or they are small,” he said.
You can see the entire report on the NBC Bay Area News website.