San Diego County District Attorney Summer Stephan announced today that PeopleConnect, Inc., the parent company for the popular social networking site, Classmates.com, 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 District Attorney’s Offices in San Diego, Los Angeles, Santa Clara, and Santa Cruz counties and the Santa Monica City Attorney’s Office. [TWEET THIS]
The task force of local prosecutors alleged that Classmates’ online sign-up process failed to make certain statutorily required disclosures about its automatically-renewing subscriptions in a clear and conspicuous manner and failed to secure the consumer’s express prior consent, as required by law. The prosecution team also alleged that Classmates’ post-payment acknowledgment failed to supply a toll-free telephone number, email address or other timely and easy-to-use mechanism for cancelation – also a violation of the automatic renewal law – and that some consumers complained that it was difficult to cancel.
“Companies that offer subscriptions that renew automatically have a responsibility to adhere scrupulously to the law to ensure consumers are not misled and are making an informed choice about how to spend their money,” said District Attorney Summer Stephan. “This is another example of our consumer protection team working successfully with their CART colleagues to achieve compliance with these important laws.”
San Diego Superior Court Judge Ronald L. Styn entered a final court judgment on the parties’ stipulated settlement on March 1, 2021.
The judgment requires Classmates to have full transparency with consumers about their automatically-renewing subscriptions. The company must:
- Clearly and conspicuously disclose its automatic-renewal terms;
- Obtain the consumers’ affirmative consent to the terms through a separate checkbox or similar mechanism before charging for an automatic renewal or continuous service;
- Email consumers a confirmation of the transaction after they pay which clearly includes the automatic-renewal terms and information on how to cancel; and
- Allow consumers to easily cancel the subscriptions, including online, effective upon request.
Classmates cooperated with the prosecution team and is taking steps to ensure its web disclosures and processes comply with California’s Automatic Renewal Laws.
Deputy District Attorney Stephen M. Spinella with the Consumer Protection Division handled this case for the San Diego County District Attorney’s Office. [TWEET THIS]