HelloFresh has agreed to a $7.5 million settlement with California prosecutors to resolve allegations that it violated the state’s Automatic Renewal Law and False Advertising Law. The case, brought jointly by the district attorneys of Santa Clara and Los Angeles Counties as part of the California Automatic Renewal Task Force, accused the meal kit company of using deceptive practices to enroll consumers in subscriptions.

According to the settlement, $6.38 million will go toward civil penalties, $120,000 will cover investigative costs, and $1 million will fund consumer restitution for eligible California residents. The agreement was approved on August 14 by Santa Clara County Superior Court Judge Daniel T. Nishigaya.

Prosecutors alleged that HelloFresh failed to:

• Clearly disclose subscription terms before charging customers

• Obtain affirmative consent prior to billing

• Provide post-purchase acknowledgments of terms

• Offer a straightforward cancellation process

• Accurately represent promotions, such as “free meals” or shipping discounts

Eligible consumers are those who were enrolled in an auto-renewal plan between January 1, 2019, and August 18, 2025, were charged for a first shipment without consent, canceled immediately afterward, and did not receive a refund. A third-party administrator will distribute restitution from the $1 million fund.

INSIDER TAKE

This settlement is another signal that regulators are cracking down on subscription practices that fail to meet clear disclosure and cancellation standards. California’s Automatic Renewal Law has been a leading enforcement tool, and cases like this illustrate the risks of relying on aggressive promotional offers or difficult cancellation paths.

For subscription executives, the takeaway is straightforward: compliance with state and federal auto-renewal requirements is no longer optional. Subscription businesses must ensure they:

• Clearly disclose recurring billing terms up front

• Secure affirmative consent before charging

• Send post-purchase acknowledgments with terms

• Provide easy, accessible online cancellation

With the FTC’s new “click-to-cancel” rule also coming (??) into play, the message is consistent: design subscriber flows with transparency and ease in mind. Companies that ignore these requirements risk not only reputational harm but also multi-million-dollar settlements and penalties.