Deceptive Trade PracticeFalse Advertising

“Negative-Option” Class Action Investigation

“Negative-Option” Investigation

Migliaccio & Rathod LLP is investigating claims by online consumers who are unwittingly charged for products or subscription services through a “negative option” feature, in violation of the Restore Online Shoppers’ Confidence Act (ROSCA). The negative option is a marketing term that automatically changes your free trial into a paid subscription. Consumer are lured in with “risk-free” trial offers that morph into a full subscription service at the end of the trial period and which can be difficult to cancel or refund once the change has been made.

Products sold through a negative option are illegal unless the seller:

  1. clearly and conspicuously discloses material terms of the transaction before obtaining the consumer’s billing information;
  2. obtains the consumer’s express informed consent before making the charge; and
  3. provides simple mechanisms to stop recurring charges.

Consumers lured in by a negative option have found themselves involuntarily renewing services that they might have otherwise cancelled, had the steps to do so been visible and accessible. Consumers have been further frustrated by the cancellation process itself, which is oftentimes unclear or hidden behind convoluted menus.

For example,Weight-loss app Noom has agreed to pay $56 million, and provide an additional $6 million in subscription credits, to end putative New York federal court class claims that it ripped off about 2 million users through a deceptive subscription auto-renewal scheme. The suit, filed in May 2020 by a group of Noom users, claims the company employs unethical user design to pressure visitors into enrolling in a trial for a nominal fee, then automatically charges customers up to $199 for a nonrefundable subscription the moment the trial ends.

Have you been charged subscription fees after a free trial?

If you were charged for a subscription after the free trial period ended, we would like to speak with you. Complete the questionnaire below or give us a call at (202) 470-3520.

Attorneys Committed to Consumer Protection

The lawyers at Migliaccio & Rathod have years of experience in class action litigation against large corporations, including in cases involving defective products and unfair & deceptive trade practices. More information about our current cases and investigations is available on our blog.