SANTA MONICA—Beachbody, one of the world’s largest sellers of exercise videos, supplements and weight-loss programs, will pay out over $3.6 million in penalties and restitution in part of a final court judgement pertaining to a consumer protection case. According to a press release from the city of Santa Monica, the Santa Monica City Attorney’s Case is among the first to require a separate checkbox for consumer’s consent for recurring payments.

The judgment was negotiated with the Santa Monica City Attorney’s Office after lengthy discussions, which followed the prosecutors’ investigation of consumer complaints. The final court judgment was approved by Judge Mitchell L. Beckloff of the Santa Monica Superior Court, and entered by the court on Monday, August 28.

The City Attorney’s Office discovered that Beachbody was charging its customers’ credit cards on an automatic, recurring basis for renewals of products and services, without customers’ prior consent as required by law.

The judgment includes a permanent injunction requiring full transparency with consumers. Before automatically renewing charges, Beachbody now must:

-Clearly and conspicuously disclose the renewal terms

-Get consumers’ consent, through a separate check-box (or similar mechanism) that does not include other terms and conditions

-Send a clear summary of the renewal terms after consumers pay

-Allow consumers to cancel easily, both online and by phone

-Send reminders of upcoming renewals for all subscriptions 6 months or longer

“The Santa Monica City Attorney’s Office is committed to protecting consumers from unfair and unlawful business practices,” said City Attorney Lane Dilg. “This is an important victory to ensure that consumers will not be subject to recurring charges imposed without their clear approval and consent.”

Under the judgment, Beachbody will pay a total of $3,579,000, including $2,579,000 in penalties and $1,000,000 in restitution to non-profit groups that work for laws and policies to help communities with health and nutrition.

Explosion of Recurring Charges

Some automatic renewals come after “free trials,” where consumers need to cancel in time to avoid the charges. Lawmakers have responded to these problems by requiring businesses to make auto-renewals clear to consumers, and to get their “express, affirmative consent” – before they collect any money.

“A separate check-box is the key,” said Chief Deputy City Attorney Adam Radinsky, who heads Santa Monica’s Consumer Protection Division. “Otherwise, it’s too confusing. Companies have too many ways to hide the auto-renewal terms.”

Unsupported Product Claims

Prosecutors alleged that Beachbody made health-related and other claims about its products that were false, misleading, and not backed by scientific evidence. These included claims in the areas of:

-Detoxifying

-Anti-aging

-Reducing inflammation

-Balancing hormones

-Preventing mental decline

The injunction requires that before Beachbody makes claims about its products, the company must have “competent and reliable” scientific studies to support the claims. Studies must be based on similar amounts and formulations as the advertised products.

(For example, if Beachbody claims one of its supplements helps to remove toxins, the supporting studies need to test a similar combination of ingredients to back the claim.)

The Santa Monica City Attorney’s Office conducted an undercover investigation, consulted with scientific experts about Beachbody’s health claims, and engaged in lengthy negotiations with the company’s attorneys over a period of more than two years.

“We appreciate the company’s cooperation and its willingness to change its practices,” said Radinsky. “Beachbody is one of the first major sellers to be up-front with its customers about consent for recurring charges, including the new, separate checkbox. They will now have one of the best online disclosure and consent pages anywhere.”

“Automatic renewal is one of the critical areas in consumer protection today,” said Radinsky. “Consumers always have the right to know where their money is going.”

The Santa Monica City Attorney’s Consumer Protection Division promotes fairness through awareness and enforcement of the law. To report a consumer issue, go to smconsumer.org or call (310) 458-8336.