In a recently filed class action lawsuit, Ancestry.com has been accused of violating California law by automatically renewing memberships without consumers’ clear permission. The suit seeks over $250 million in restitution. The company reportedly stated that an award of attorney fees would further increase the amount in controversy to over $312 million.
The plaintiff alleges that Ancestry didn’t provide her and other consumers with automatic renewal disclosures as required by California law. The complaint also alleges “[t]here are hundreds of customer complaints about Ancestry.com posted on various consumer websites, including but not limited to the Better Business Bureau, Yelp, Consumer Affairs, and Ripoff Report.” That indeed does appear to be true.
Based on the exhibits filed with the complaint the problem appears to arise in language on the landing page and where a consumer chooses the type of membership to purchase. The landing page says “start your free trial” without any mention of membership or automatic renewal. The page where you choose which membership to sign up for indicates the trial is free for 14 days and then instructs the consumer: “choose a membership to try. There is no risk – you will only be billed if you decide to keep your membership after the free trial.”
Use of “if you decide” implies that one must take a positive step to remain a member and does not properly convey negative option – namely if you do nothing you will be automatically charged. Then on the payment page, there is a reference to the fact that the card will be charged but again the language does not adequately convey that if the consumer doesn’t take any affirmative action their card will be charged – it is simply not that clear (“We’ll use your payment details to provide continued service after your trial ends. You can cancel at any time and you will not be charged until your trial is complete.”)
In addition, the acknowledgment did not convey how one actually can cancel in a clear and conspicuous fashion. There is a hyperlink on the payment page to “Renewal and Cancellation Procedures” but a hyperlink is avoidable and therefore is never sufficient for clear and conspicuous disclosure.
On the order summary it does say that the membership is “14 days free, then $24.99 a month” but again it could be clearer and disclosure after signing up is simply too late.
Takeaway: This case might be a close call and obviously the case has just been filed and not litigated – but the takeaway here is that when selling a free trial that converts to automatic renewal the fact that the continued service and charge to the card happens automatically unless the consumer takes an affirmative action should be clear and unambiguous and certainly any clear disclosure cannot be relegated to a hyperlink. We will keep you posted on this case.