ClassPass Subscriptions Violate California’s Automatic Renewal Law, Class Action Says
Chabolla v. ClassPass Inc.
Filed: January 30, 2023 ◆§ 3:23-cv-00429
Health club aggregator ClassPass faces a class action over its allegedly unlawful auto-enrollment practices for its monthly fitness and wellness subscriptions.
California Unfair Competition Law California Automatic Renewal Law California Consumers Legal Remedies Act
Health club aggregator ClassPass faces a proposed class action over its allegedly unlawful auto-enrollment practices for its monthly fitness and wellness subscriptions.
The 29-page case claims that ClassPass, a “fitness marketplace” whose subscription service provides access to over 30,000 partner studios, ropes unsuspecting consumers into free or low-cost trial periods and then saddles them with unauthorized charges that automatically renew each month. The filing alleges that ClassPass has run afoul of California’s Automatic Renewal Law (ARL) by automatically billing consumers each month without obtaining their affirmative consent or properly disclosing its automatic renewal terms. ClassPass further violates the ARL by purposefully making it difficult for consumers to cancel their unwanted subscriptions, the complaint contends.
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Worse yet, the lawsuit says that ClassPass paused consumers’ subscriptions at the start of COVID-19 lockdowns in March 2020 but “quietly” unfroze accounts and began charging consumers unauthorized fees after many of its partner studios had reopened in May 2021. Per the suit, ClassPass buried this news in an email sent to customers only a week before the automatic charges would go into effect.
According to the case, when a consumer initially signs up for a subscription, ClassPass fails to present its terms and conditions in a “clear and conspicuous” manner as defined by the ARL. Although ClassPass was required to use a larger, different-colored or bolded font or symbols to call attention to its auto-renewal terms, the disclosures included on its payment page are overshadowed by more eye-catching components, the filing claims.
Notably, ClassPass fails to obtain consumers’ affirmative consent to the automatic renewal terms before they check out given there is no checkbox or other method to indicate that they accept the terms, the suit states.
Further, the complaint says that on its payment page, ClassPass’ incomplete and inconspicuous disclosure states that consumers can “[c]ancel anytime … to avoid renewal” while failing to specify the cancellation policy’s terms, including that:
“(i) consumers must actually cancel by 12:00 PM Eastern on the day before the last day of the trial to avoid charges, and (ii) that if consumers cancel during their trial, they will lose the credits they paid for, they will not be able to schedule any new classes, and they will have any upcoming reservations cancelled—even if those classes were scheduled to occur during the trial period.”
Only after customers complete their purchase does ClassPass reveal in an acknowledgment email its policy concerning paid trial cancellations, the case relays. However, the email fails to mention the stipulation that consumers must cancel their trial two days before it ends by 12:00 p.m. Eastern Time to avoid charges, the suit states.
Moreover, ClassPass’ confirmation email lacks certain information required by the ARL, including a description of a “cost-effective, timely, and easy-to-use mechanism for cancellation” that is “capable of being retained by the consumer,” the suit claims.
Although the ARL requires a company to maintain a “timely” and “easy-to-use” subscription cancellation method, such as a “prominently located direct link or button” in customers’ account profile or an “immediately accessible termination email,” ClassPass’ process forces consumers to take “multiple, confusing steps that hinder cancellations,” the case says. To cancel their subscriptions, customers must log into their account, search for a button labeled “Manage plan,” dig for a hidden cancellation link, take two separate surveys and then finally click a “Cancel my membership” button that is “de-emphasized and can be easily missed,” the filing relays.
The lawsuit looks to cover anyone in California who has been charged by ClassPass for an auto-renewing subscription for any product or service in connection with a purchase made via the company’s website since January 30, 2019.
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