On Jan. 20, Santa Cruz County District Attorney Jeffrey Rosell announced that Home Chef, an online home-cooked meal delivery company, has agreed to change its websites and sales practices to protect California consumers.
The Chicago-based company will pay $450,000 in penalties pursuant to a judgment filed by the California Auto Renewal Taskforce in Los Angeles. The terms are part of a final court judgment negotiated with CART, a task force of prosecutors that includes the District Attorney offices of Santa Cruz, Santa Clara, Los Angeles, San
Diego, and Santa Barbara counties, and the Santa Monica City Attorney’s Office.
Federal and state law require businesses to provide consumers with clear disclosure of their automatic renewal terms and conditions before charging them for the service.
The disclosure must include instruction for the cancelation of the automatic renewal subscription. The law requires businesses to obtain consent from customers prior to automatic renewal and provide confirmation of the transaction.
“We continue to be part of the joint effort to ensure that consumers always have the right to know if they are going to be subject to ongoing charges,” said Rosell.
Online “subscriptions” and other automatically recurring charges have proliferated in the U.S. in recent years.
Some renewals come after “free trials,” in which consumers need to cancel in time to avoid the charges. Federal and state law requires businesses to make these automatic renewals clear to consumers, and to get their “express, affirmative consent” – before collecting any money.
However, many businesses still do not follow this law, according to Rossell.