A proposed class action claims that Optavia, LLC and parent company Medifast, Inc. have unlawfully enrolled consumers in their auto-shipment program for weight loss products and services without proper consent to do so.
The 32-page case alleges the defendants, whose subscription-based Optavia Premier weight loss program can cost upwards of $500 per month, have violated California’s Automatic Renewal Law by failing to provide proper disclosures prior to and after customers, often unwittingly, sign up for the program.
According to the suit, Optavia and Medifast are fully aware that their automatic renewal scheme is misleading yet have continued to charge customers each month without obtaining proper consent. Moreover, the lawsuit alleges that customers who try to cancel their memberships or return products are given “the runaround” by Optavia and Medifast, who are described in the filing as a “multi-level marketing business.”
“In sum, for every subscription product purchased from the Optavia website, Defendants fail to make the legally required disclosures, fail to obtain affirmative consent for automatic recurring charges, misrepresent and conceal material facts regarding Optavia Premier, and mislead reasonable consumers into thinking that they are simply making a one-time purchase,” the complaint states. “Defendants then make it difficult to cancel and fraudulently continue to charge consumers who seek refunds or cancellation.”
The lawsuit relays that Optavia is a multi-level marketing company who recruits consumers, referred to as “coaches,” to market and sell weight loss meal plans and products. Per the suit, the company’s business is driven by Optavia Premier, its automatically renewing product subscription program which reportedly accounts for 92 percent of Optavia’s total revenue.
The lawsuit claims, however, that Optavia has failed to provide certain disclosures required by California law prior to and after customers purchase the company’s automatically renewing product shipments. Instead, Optavia uses “dark patterns” to enroll customers in the program without their knowledge or consent, the suit alleges.
According to the case, when a customer attempts to order an Optavia product through the company’s website, the option to enroll in Optavia Premier is pre-checked. The suit contends that this violates California’s legal requirement that consumers affirmatively consent to auto-renewing charges.
“This is the opposite of how an affirmative consent box is supposed to work,” the complaint argues. “It is designed to, and does, cause reasonable consumers to miss the fact that they are being auto-enrolled.”
Throughout the rest of the purchase process, consumers are never told “in a clear and conspicuous manner,” as required by law, that they are enrolling in an automatically renewing subscription, or what the terms of the offer are, the suit alleges. The case says that this is especially true when a customer orders products through an Optavia coach because the company’s coaches are not trained to comply with California’s Automatic Renewal Law. Per the suit, California law requires that every automatic renewal offer clearly state:
That the subscription or purchasing agreement will continue until the consumer cancels;
A description of the cancellation policy;
The recurring charges that will be charged to the consumer, that the amount may change, and the amount to which the charge will change, if known;
The length of the automatic renewal term or that the term is continuous, unless the length of the term is chosen by the consumer; and
The minimum purchase obligation, if any.
Following each purchase, the defendants fail to provide Optavia Premier customers with an acknowledgment that includes the terms of the automatic renewal plan, cancellation policy and instructions on how to cancel in a manner that can be retained by the customer, the lawsuit alleges.
Instead, the confirmation email customers receive contains “confusing and misleading” statements that appear to suggest that the customer is not enrolled in Optavia Premier, and fails to include any of the required information, the case claims.
The suit goes on to allege that the defendants have failed to provide a “cost-effective, timely, and easy-to-use mechanism” for canceling the recurring charges and have instead thwarted customers’ attempts to delay, cancel or return shipments.
According to the lawsuit, Optavia has received hundreds of customer complaints regarding its apparent auto-enrollment scheme, which the case argues is proof that the company is well aware that it is misleading consumers.
The lawsuit looks to represent all Optavia or Medifast customers in California who were automatically enrolled in Optavia Premier and were charged at least one renewal fee by the defendants within the statute of limitations period.
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