The parent company for Classmates.com has settled a consumer protection lawsuit alleging the website did not properly inform its users regarding automatic subscription renewals, the San Diego County District Attorney’s Office announced Wednesday.
A final court judgment was entered Monday by a San Diego judge that will have PeopleConnect Inc. paying $400,000 in penalties and costs and up to $150,000 in restitution to settle the suit alleging violations of state Automatic Renewal Laws.
According to prosecutors, the website’s online sign-up process did not make statutorily required disclosures regarding its automatic renewals and did not secure users’ express prior consent as required by law. The site also did not provide an easy-to-use mechanism for cancellation, leading some consumers to complain that it was difficult to cancel their subscription, the DA’s Office said.
The settlement agreement holds that the company must:
- clearly and conspicuously disclose its automatic-renewal terms
- obtain the consumers’ affirmative consent to the terms through a separate checkbox or similar mechanism before charging for an automatic renewal or continuous service
- email consumers a confirmation of the transaction after they pay which clearly includes the automatic-renewal terms and information on how to cancel
- allow consumers to easily cancel the subscriptions, including online, effective upon request.
“Companies that offer subscriptions that renew automatically have a responsibility to adhere scrupulously to the law to ensure consumers are not misled and are making an informed choice about how to spend their money,” District Attorney Summer Stephan said.
The DA’s Office said the company has cooperated with the prosecution team and is taking steps to comply with state law.
The lawsuit was filed by the California Auto Renewal Task Force, which includes the district attorney’s offices in San Diego, Los Angeles, Santa Clara, and Santa Cruz counties, as well as the Santa Monica City Attorney’s Office.