DA Announces Consumer Protection Settlement In Auto-Renewal Case

Press release from the Santa Cruz County District Attorney’s Office:

Santa Cruz County District Attorney, Jeffrey Rosell announces that PeopleConnect, Inc., the parent company of the popular social networking site, Classmates.com, has agreed to pay $400,000 in penalties and costs and, up to $150,000 in restitution as part of the settlement of a consumer protection lawsuit alleging that Classmates violated California’s Automatic Renewal Laws. The lawsuit was filed by the California Auto Renewal Task Force (CART), which includes the Santa Monica City Attorney’s Office and the District Attorney’s Offices of Santa Cruz, Los Angeles, San Diego, and Santa Clara counties.

CART alleged that Classmates’ online sign-up process failed to make certain required statutory disclosures about their automatic renewal subscriptions in a clear and conspicuous manner and failed to secure the consumer’s “express, affirmative consent,” as required by law. The prosecution team also alleged that Classmates’ post-payment acknowledgement failed to supply a toll-free telephone number, email address or other timely and easy-to-use mechanism for cancellation – also a violation of the automatic renewal law.

Federal and state law requires businesses to provide consumers with clear disclosure of their automatic renewal terms and conditions before charging them for the service. The disclosure must include instruction for the cancellation of the automatic renewal subscription. The law requires businesses to obtain consent from customers prior to automatic renewal and provide confirmation of the transaction.

“We continue being part of the joint effort to ensure that Consumers always have the right to know if they are going to be subject to ongoing charges,” said District Attorney Jeffrey Rosell.
Classmates is the latest in a series of consumer protection settlements obtained by the Santa Cruz County District Attorney Consumer and Environmental Affairs Unit working in conjunction with CART and other statewide prosecutor task force efforts.

This press release was produced by the Santa Cruz County District Attorney’s Office. The views expressed here are the author's own.