Vermont held AdoreMe liable for hidden subscriptions, misrepresenting time-limited discounts, and obstructing subscription cancellations.
Excerpt
Our analysis
Vermont has reached a settlement with lingerie retailer 'Adore Me' concerning allegations of deceptive advertising and billing practices. Adore Me offered consumers discounted pricing as part of its VIP Membership Program, which charged consumers $39.95 per month unless they made a purchase or chose to "skip" the charge by the sixth day of each month. The monthly charges accumulated as store credits for future use.
- The Attorney General contended that Adore Me failed to provide clear disclosures about the program's terms and the monthly charge, misrepresented time-limited discounts, made it challenging for consumers to cancel their VIP Memberships, and, when canceled, wrongfully refused to refund unspent credits to members. These practices were found to violate the Restore Online Shoppers’ Confidence Act (“ROSCA”), 15 U.S.C. § 8403, as they involved deceptive design patterns of, hidden subscriptions, the creation of fake urgency, and difficulties in the cancellation process.
Outcome
Adore Me reached a $2.35 million multistate settlement, with the State of Vermont set to receive approximately $34,000, and program members to be notified about refund options for unused credits in their accounts. As part of the settlement, Adore Me committed to implementing clearer offer terms and facilitating hassle-free account cancellations for consumers. Additionally, they will notify all active VIP Memberships about the opportunity to obtain refunds for any remaining store credits.
Parties
Vermont Attorney General and Adore Me, Inc
Case number
23-CV-02590
Decision
Related deceptive patterns
The hidden subscription deceptive pattern typically works by employing some form of sneaking or misdirection. Users think they are buying one thing, when in fact there's a hidden legal stipulation that they are in fact signing up to a recurring subscription. Once they have signed up, the service is usually covert and the user is sent no emails or notifications reminding them that they are paying on a recurring basis, so that payments continue for as long as possible. It is also typically paired up with the hard to cancel deceptive pattern.
When a user is placed under time pressure, they are less able to critically evaluate the information shown to them because they have less time and may experience anxiety or stress. Providers can use this to their advantage, to push them into completing an action that may not entirely be in the user's interest.
Hard to cancel (aka "Roach Motel") is a deceptive pattern where it is easy to sign up for a service or subscription, but very difficult to cancel it. This typically involves hiding the cancellation option, requiring users to call customer services to cancel, and making the cancellation process overly complex and time-consuming. This can cause users to give up trying to cancel, and continue paying for the service for a longer period.
Related laws
Requires companies to obtain consumer's consent before charging their credit or debit cards for goods or services offered through a "negative option feature."