The company subsequently reached a settlement with California's state government for $1.2 million. Savage X Fenty's marketing also informed customers that those charges could be used as purchase credits without telling them that the credits only applied to purchases of $49.95 or more, according to the complaint. Those terms required consumers to opt out of the program to avoid monthly charges. The nonprofit said that Savage X Fenty lured shoppers to the site with VIP member discounts on lingerie and automatically enrolled them in its membership program without fully disclosing the terms and conditions. SAVAGE X FENTY, ADORE MEĬonsumer protection nonprofit Truth in Advertising filed a lawsuit in 2020 against Savage X Fenty and its parent company TechStyle, which also owns e-commerce platforms such as JustFab and Fabletics, for the company's automatic enrollment techniques. "This is the first time a court is looking at the adequacy of these types of disclosures and other practices that have become pretty common now," she said. Retailers should be "very concerned" that the FTC is pursuing action against auto-renewal terms, multi-step cancellation policies and other practices that have become widespread across many online subscription platforms, said Kathleen Benway, a former chief of staff at the FTC's Bureau of Consumer Protection. William Kovacic, a professor at George Washington University Law School and former commissioner of the FTC, said that the Amazon lawsuit is a way "to make a point," change Amazon's practices and "develop a template for standards for the entire sector." Both the prior and new cancellation process comply with applicable law, Amazon said. Last year, Amazon changed its process to cancel Prime with "two clicks" in Europe to comply with the European Union's consumer protection rules, and it altered the process in the U.S. Amazon "substantially revamped its Prime cancellation process" to some customers before the lawsuit was filed, according to the complaint.Īmazon, which launched Prime in 2005 and has around 170 million subscribers in the U.S., said it is willing to defend itself in court. Prime members in the United States pay $139 per year for free delivery, and drive much of Amazon's sales volume.įor years, Amazon "knowingly complicated the cancellation process for Prime subscribers who sought to end their membership," the FTC said in the complaint. The FTC accused the e-commerce giant of duping "millions of consumers" into purchasing subscriptions for Prime services. Federal Trade Commission, which filed a lawsuit against it in Seattle. Thirty percent of Americans were enrolled in a subscription service in 2022, according to a survey of 37,720 people by Euromonitor Inc, up from 20% of respondents in 2017.Īmazon is under fire from the U.S. Many collect monthly fees from shoppers in exchange for free delivery, unlimited tech support or discounts on merchandise. retailer accused of using deceptive tactics to sell memberships to shoppers.įrom big-box chains Walmart (WMT.N) and Best Buy (BBY.N) to specialty retailers like Savage X Fenty and Adore Me, retailers' subscription programs are facing growing scrutiny. NEW YORK, June 23 (Reuters) - Inc (AMZN.O) isn't the only U.S.
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