Auto Renewal Lawsuits
Subscription-based services have skyrocketed in popularity over the last decade, and almost all of them include the option of automatic renewal. Consumers and businesses can mutually benefit from the ease of automatic renewals, but some businesses have taken advantage of this convenience at their customers’ expense.
- Many companies use auto-renewals in subscription services, often making it difficult to cancel or opt out.
- Legal action is being taken against businesses that use deceptive practices to enforce auto-renewals without clear consumer consent.
- Consumers are encouraged to check subscription terms carefully to avoid unwanted auto-renewals and associated fees.
- Class actions are available for consumers who have been unfairly charged due to misleading auto-renewal practices.
Victims of unethical auto renewal practices may be eligible to receive compensation through an auto renewal lawsuit. Several class action lawsuits are in progress against major companies for these deceptive practices. Class Action U can connect you with an experienced attorney to discuss your ability to join one of these lawsuits or start one yourself as a lead plaintiff.
What Are Auto Renewals?
Companies that offer goods or services on a subscription basis often include automatic renewals in their contracts. In these arrangements, the company keeps the consumer’s payment information on file and automatically charges their card before the next billing period ends.
Examples of business models that use auto renewals include video streaming services, meal kit delivery services, and gym memberships. These companies may automatically charge customers monthly, every few months, annually, or after a free trial period ends.
Auto renewals sometimes occur under legitimate circumstances, such as when customers intentionally sign up for a recurring subscription. However, many auto renewals occur without the customer’s informed consent and can be difficult to opt out of.
Illegal Auto Subscription Tactics
Some businesses use deceptive or even illegal tactics to get customers to sign up for an auto renewal or force them to remain subscribed, such as:
- Automatically enrolling a customer into an auto subscription under the guise of a one-time purchase.
- Making it unreasonably difficult to cancel an auto subscription, such as requiring the customer to call a phone number that the company never answers or burying the cancellation option in a maze.
- Offering a free trial and not adequately disclosing that the customer will be automatically charged once the trial ends.
- Using confusing or misleading language in their terms and conditions to hide the fact that customers are signing up for an auto subscription.
- Continuing to charge a customer’s card after they have canceled their subscription.
A fair auto subscription policy should always involve the customer’s explicit consent. Companies should provide notices before automatically renewing customers’ subscriptions, making it easy for them to cancel if they no longer wish to be subscribed. If a company fails to abide by these rules and you lose money, you may have the right to seek legal compensation.
How Much Could You Be Entitled to From an Auto Renewal Class Action Lawsuit?
If you are eligible to join an automatic subscription class action lawsuit, you may receive compensation for the money the company wrongfully charged you and more. The exact amount you’ll receive will depend on various case-specific factors.
Class action compensation is often less than what you would receive if you pursued an individual lawsuit. On the other hand, a class action suit may be more likely to succeed. Even if your compensation is relatively modest, it may still be worth pursuing. Further, if you choose to start a class action, you may be eligible for additional compensation for your role in spearheading the lawsuit.
Ultimately, class actions are designed to empower injured parties by pooling resources and giving them a collective voice. Monetary compensation aside, your efforts could help protect all consumers from unethical auto renewal practices and other forms of misbehavior.
Advice to Consumers
Companies should be transparent in their auto renewal practices, but you can also take additional measures to protect yourself as a consumer. Before providing your payment information, read the terms and conditions carefully and ensure you understand the company’s renewal policy. If you’re signing up for a free trial and don’t want to continue with a paid subscription, set a reminder to cancel before the renewal date.
Many people subscribe to services they don’t realize will renew automatically, so it’s also a good idea to review your bank statements regularly for any unexpected charges. Contact your bank or credit card company if you don’t recognize a recurring charge. They can help you dispute it or even close your account to prevent further charges.
Examples of Auto Renewal Class Actions
Several high-profile companies have faced recent class action automatic renewal lawsuits for their deceitful subscription practices, including:
- NordVPN – A 2024 class action lawsuit alleged that NordVPN, a virtual private network (VPN) provider owned by NordSec, duped consumers into paying for subscriptions and made it intentionally difficult to cancel.
- Adobe – In 2024, a proposed class action lawsuit alleged that Adobe deceitfully enrolled subscribers in auto renewal plans.
- Amazon – In 2022, consumers filed a class action lawsuit against Amazon for allegedly charging customers for monthly or annual subscriptions without properly disclosing the auto renewal terms or receiving proper authorization from customers. Amazon has also been the target of a Federal Trade Commission lawsuit for tricking customers into signing up for Prime memberships and making cancellation unreasonably complicated.
- New York Times – Another 2022 class action lawsuit involved The New York Times’ subscription auto renewal practices, alleging that the company automatically renewed subscriptions without providing legally required disclosures and authorizations.
- Noom – Noom, a diet and exercise app that operates on a subscription basis, resolved a class-action lawsuit in 2022 for alleged violations of consumer protection laws in its enrollment, cancellation, and auto renewal practices.
How to Start or Join an Auto Renewal Lawsuit
If you suspect you have been subjected to an unfair automatic renewal scheme, contact Class Action U to learn about your legal options. There may already be a class action automatic renewal lawsuit in progress that you can join. If another lawsuit is not yet in progress, we can help you explore the possibility of starting a class action.
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