Hearst Magazine Media and CDS Global face a proposed class action wherein two plaintiffs allege the companies have overstepped California law by enrolling consumers in automatic renewal or continuous service subscriptions without providing “clear and conspicuous disclosures” or obtaining affirmative consent to do so.
Traditionally, magazine publishers sold subscriptions that reflected a schedule for which a fixed price was to be paid by a subscriber for a definite term, typically one to three years, the lawsuit begins. When the end of that term approached, the case explains, the consumer would be notified that their subscription was coming to an end and provided with a subsequent renewal offer.
In the 1990s, however, marketers unenthused with the aforementioned subscription model adopted a “negative option” approach to getting consumers to re-up their subscriptions, per the suit. For a “negative option,” the case explains, a seller of a product or service interprets a customer’s failure to take action, e.g. failure to affirmatively reject an offer to cancel an agreement, as assent to be charged for said product or service. According to the complaint, the defendants have utilized the “negative option” subscription model as a means to keep consumers subscribed to Hearst magazine titles such as Food Network, Cosmopolitan, Car & Driver and Good Housekeeping.
According to the 19-page lawsuit, Hearst, one of the world’s largest magazine publishers, and CDS, one of the world’s largest subscription fulfillment houses, work in tandem and in violation of California’s Automatic Renewal Law by renewing consumers’ magazine subscriptions without making certain mandatory disclosures. California law, the case says, makes it unlawful for companies to:
Fail to present automatic renewal offer terms or continues service offer terms in “a clear and conspicuous manner” before the subscription or purchasing agreement is fulfilled and “in visual proximity” to a request for consent to said offer;
Charge a consumer’s payment card or account for an automatic renewal without first obtaining the individual’s affirmative consent; and
Fail to provide “in a manner that is capable of being retained” by the individual an acknowledgement that includes the terms of the automatic renewal or continuous service offer, cancellation policy and details on how the consumer can cancel.
The plaintiffs allege that they arenot the only consumers“to be victimized by [the defendants] in connection with magazine subscriptions.” Echoing similar proposed class actions, both individuals allege the defendants charged their credit cards for automatic subscription renewals without adhering to the California Automatic Renewal Law.
Initially filed in San Diego County Superior Court, the case has been removed to California’s Southern District.