How would you like to buy an item online—some Adore Me underwear, for example—and find out, months later, that the company charged you each month for more underwear? No, it hasn’t sent you anything, but you’re welcome to pick something out for the money it’s already taken from you. It claims that when you made your purchase, you signed up for a “subscription.”
Subscriptions have become big business. The top sixteen companies earned $5.6 billion in revenue in 2017, says a CNBC article, and a McKinsey report says that sales have grown more than 800 percent between 2013 and 2017.
It’s not surprising, then, that companies want to get in on the trend. Unfortunately, some are doing it in an underhanded manner.
We’re investigating, to see if a class action is needed.
In the case of Adore Me, customers were automatically signed up for subscriptions when they made a purchase. To avoid this, they would have to uncheck a small box which customers often didn’t notice.
Terminating the subscription was difficult as well. Two former customer service employees for Adore Me said they was trained to try to get customers to retain their subscriptions. They were to offer, for example, to put the subscription on hold for a month; or they were to put a customer caller on hold for a long time to discourage them from pursuing the problem.
Getting the subscription cancelled was one hurdle; getting the money refunded was another. The Federal Trade Commission (FTC) said that when Adore Me cancelled a subscription, it also simply took away all the credits in the account. In other words, if you’d been charged $180 for your subscriptions, the $180 was not refunded but simply disappeared.
The FTC finally cracked down on Adore Me, which has now agreed to pay $1.38 million to settle the suit. It has reached agreements with giants such as Apple, which is paying $32.5 million to settle a suit on in-app charges, and eHarmony, which is paying $1.28 million over automatic subscriptions.
The FTC has also brought suit against a smaller online company which claimed to offer a “trial” product for just $1.03 plus shipping and handling, but signed up those who accepted for two different $100-per-month subscriptions. Trans World Entertainment has also recently been hit by a class action for subscription deceptions.
But many companies are still trying to get customers to pay for subscriptions through underhanded methods.
California residents are lucky because the state has a strong subscription-renewal law, but residents of other states may have a case as well. If you’ve been scammed by a company signing you up for a subscription without your knowledge, we’d like to hear from you. Fill out the form on this page and let us know what your experience was.Article Type: Investigation