Two wine home delivery companies accused of automatically renewing membership subscriptions in violation of state law agreed to pay $365,000 and change sales practices to settle a consumer protection lawsuit, prosecutors in Los Angeles County and elsewhere in California announced Monday.
District attorneys in Los Angeles, San Diego, Santa Clara and Santa Cruz — as well as the Santa Monica city attorney — filed suit against Direct Wines, Inc. and Wine Awesomeness, LLC, alleging illegal practices.
In California, business are required by law to conspicuously disclose all automatic renewal charges and get consent from consumers. Direct Wines, a Delaware-based wine club marketing company, and Wine Awesomeness, a South Carolina wine retailer, did not admit wrongdoing but agreed to change their business practices.
They must conspicuously disclose their terms for renewal, charge customers only when consent has been expressly obtained, provide confirmation and offer an easy-to-use mechanism for cancellation, including the ability to terminate the contract online. All cancellations must be effective upon request.
Settlements were reached separately with the two businesses earlier this month. The alleged violations occurred between 2013 and 2018.
In 2015, the Los Angeles County District Attorney’s Office set up the California Automatic Renewal Task Force with the five other agencies involved in the suits to address auto-renewal issues that have plagued consumers who buy goods and services online. Businesses in a variety of industries fail to disclose that subscriptions will be automatically renewed until canceled or otherwise violate state law.
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