HungryRoot Automatic Subscription Renewals California ARL Class Action

E-commerce subscriptions are a fast-growing segment of the world economy. Unfortunately, some subscribers appear to be paying for subscriptions for longer than they want to—to the point where California has passed an Automatic Renewal Law (ARL) setting forth conditions for automatic subscription renewals for consumers in that state. The complaint for this class action alleges that HungryRoot, Inc.’s automatic subscription renewals violate the ARL.

The class for this action is all persons in California who, from the beginning of the applicable statute of limitations period up to the date of final judgment in this case, incurred renewal fees in connection with HungryRoot subscriptions.

Subscriptions, or continuous service offers, operate when a business provides regular services or shipments of goods to consumers in exchange for regular payments. The complaint alleges, “Analysts at UBS predict that the subscription economy will expand into a $1.5 trillion market by 2025, up from $650 billion in 2020. That constitutes an average annual growth rate of 18%…” Subscription models did particularly well during the Covid-19 lockdowns, UBS says.

While people may drop subscriptions quickly if they don’t deliver well, the complaint claims that if the cancellation process is “unclear or complicated,” consumers may find it too difficult or time-consuming to cancel. The complaint quotes the Washington Post as saying, “The real money is in the inertia.” According to the complaint, some companies are deliberately making it difficult for consumers to cancel.

The complaint alleges that HungryRoot’s “recent growth in revenues and subscriber count with respect to its HungryRoot Subscriptions coincides with a sharp decline in subscriber satisfaction… Specifically, [HungryRoot] has been using various types of dark patterns, including but not limited to ‘roach motel,’” where consumers find it easy to get into a subscription but hard to get out of it.

California’s ARL is meant to prevent these types of situations. It requires that online retailers who offer automatically renewing subscriptions must do certain things:

• They must get the consumer’s affirmative consent to the subscription before the purchase is completed.
• They must “present the complete auto-renewal terms in a clear and conspicuous manner and in visual proximity to the request for consent” before the purchase is completed.
• They must give the consumer “an acknowledgement identifying an easy and efficient mechanism for consumers to cancel the subscriptions.”

The complaint alleges that HungryRoot has done none of these things.

Also, the complaint alleges, HungryRoot “makes it exceedingly difficult and unnecessarily confusing for consumers to cancel their HungryRoot Subscriptions.” The plaintiff in this case believed she had cancelled her subscription, but her credit card was charged just three days later for the next shipment. The complaint alleges that she has “reached out to customer support multiple times for [HungryRoot] to cancel her subscription from HungryRoot and has not heard anything regarding her cancellation status.”

Article Type: Lawsuit
Topic: Consumer
Tags: Automatic Subscription Renewal or Continuous Service Agreement, Deceptive Advertising, Difficult to Cancel, Unfair Subscription Practices, Unlawful Subscription Renewal