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NakedWines.com Settles Consumer Protection Lawsuit

San Diego County District Attorney Summer Stephan announced today that Nakedwines.com, Inc. settled a consumer protection lawsuit alleging that Naked Wines violated provisions of California’s Automatic Renewal Laws. As part of the settlement, Naked Wines entered into an injunction prohibiting future violations of renewal laws and, without admitting liability, agreed to pay $650,000 in civil penalties and costs.

The lawsuit was filed in San Diego Superior Court by the District Attorneys for San Diego, Alameda, Napa, Shasta, and Sonoma counties. The prosecution team alleged that Naked Wine’s “Wine Angel” program failed to adequately inform consumers that they were enrolling in a subscription that would charge $40 a month that members could use to purchase select wines. The prosecution team also alleged that the company’s “Wine Genie” product – an automatically-renewing monthly subscription for pre-selected wine shipments – similarly failed to comply with automatic renewal laws. In addition, the complaint alleges that both programs’ post-payment acknowledgments did not have all the requisite disclosures mandated under the law, and that their cancelation processes failed to supply an easy-to-use mechanism to stop recurring charges.

“California’s strict automatic renewal laws are designed to ensure that consumers are not misled when signing-up for subscription-based services or product deliveries,” said District Attorney Summer Stephan. “This is another example of our consumer protection team working successfully with their counterparts across the state to achieve compliance with these important laws.”

The settlement is the latest in which the San Diego County District Attorney has participated as part of its ongoing effort to ensure that businesses offering automatically renewing subscriptions or shipments of product comply strictly with the state’s automatic renewal laws.  Further, since July, amendments to the law require that merchants offering automatically renewing subscriptions or shipments of product online must now make certain that:

  • Consumers can cancel online.
  • Consumers who wish to cancel online have access to a prominently displayed direct link in the customer account or a pre-formatted email that the consumer can use to cancel.
  • The consumer can cancel immediately.
  • Companies can no longer require consumers to engage further steps, such as answering questions or completing surveys as a condition of cancelation, or otherwise make it difficult to complete the cancelation process.

San Diego Superior Court Judge Timothy Taylor entered a final court judgment on the parties’ stipulated settlement on October 6, 2022.

Naked Wines cooperated with the prosecution team and has taken 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 Unit handled this case for the San Diego County District Attorney’s Office.

DA Warns Against Price Gouging for Baby Formula

San Diego County District Attorney Summer Stephan is warning businesses and scammers not to take advantage of consumers by price gouging for baby formula during the ongoing shortage brought on by supply chain issues. Stephan says her office is accepting reports of price gouging for potential investigation and prosecution. On Tuesday, Governor Gavin Newsom issued an executive order establishing protections against price gouging for families struggling to access safe and affordable baby formula, clearing the way for prosecutors to file criminal charges.

“We want county residents to know that we stand ready to protect their consumer rights under the law and we won’t let people looking to cash in by taking advantage of families in need,” DA Stephan said. “We take violations related to price gouging very seriously and encourage consumers to report suspected price hikes that they believe may be illegal.”

The Governor’s order generally prohibits selling infant formula at a price that exceeds, by more than 10 percent, the price of the formula charged by the seller on February 17, 2022. Violators of the order are subject to criminal prosecution that can result in a fine of up to $1,000 and/or by imprisonment up to six months. Violators are also subject to civil enforcement actions including civil penalties of up to $2,500 per violation, injunctive relief, and mandatory restitution.

You can report suspected price gouging (in English or Spanish) to the District Attorney’s Consumer Protection Unit at (619) 531-3507 or at consumer@sdcda.org

Resources for Parents

  • Parents should not use recalled formula. Return recalled formula to the store or call the manufacturer of the recalled formula at 800-986-8540 for a replacement.
  • Parents struggling to find baby formula should visit healthychildren.org.
  • More information and resources can also be found in the California Department of Public Health’s Consumer Alert and the U.S. Department of Health and Human Service’s Fact Sheet on the baby formula shortage.
  • Families using benefits through the California Women, Infants, and Children (WIC) program can find more information on the California WIC Infant Formula Availability webpage.
  • Before buying baby formula from any unfamiliar source, research the company’s reputation through the Better Business Bureau (BBB) at www.bbb.org. For more information about potential scams related to the baby formula shortage, visit the BBB website here.

The District Attorney’s Consumer Protection Unit is a sub-unit of the Economic Crimes Division. The unit is composed of Deputy District Attorneys, Investigators and Paralegals dedicated to protecting consumers and law-abiding businesses from fraudulent or unfair business practices.

When appropriate, the Consumer Protection Unit will investigate consumer complaints. These complaints typically involve businesses within San Diego County that are involved in unfair or illegal practices.