SANTA MONICA—On Friday, May 3, the Los Angeles County District Attorney’s Office announced a settlement was reached with Thrive Market Technologies, Inc., an e-commerce membership-based retailer offering natural and organic food products. The company is expected to pay $1.55 million to settle a civil lawsuit alleging it violated the California Automatic Renewal Law and False Advertisement Law.
State law prohibits companies from automatically renewing consumers’ subscriptions without clearly and conspicuously disclosing the subscription terms or without their affirmative consent. State law also prohibits companies from displaying a price that suggests a discount or a deal without support.
Under a judgment negotiated with the company entered on April 30 in Santa Barbara County Superior Court and signed by Judge Colleen K. Sterne, the company was additionally ordered to comply with the following terms:
-Clearly and conspicuously disclose its automatic renewal terms;
-Obtain consumers’ affirmative consent to the terms through a checkbox before charging for an automatic renewal subscription;
-Email consumers a confirmation of the transaction that includes the automatic renewal terms after they pay;
-Allow consumers to cancel their subscription online at will; and
-Avoid making misleading statements regarding its subscription and products.
The company did not admit any wrongdoing. They were cooperative in the investigation and has taken steps to correct the violations.
The case was investigated by the California Automatic Renewal Task Force (CART). The Los Angeles County District Attorney’s Office formed CART to address rising consumer complaints against online automatic renewal subscriptions. In addition to LADA, CART includes the district attorneys’ offices of Santa Barbara, Santa Clara, Santa Cruz, San Diego, and the Santa Monica City Attorney’s Office.
