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Trusted Media Brands and California Automatic Renewal Law Class Action

Cover of Reader's Digest, a TMB Publication

California passed its Automatic Renewal Law (ARL) in 2009, to prevent companies from extending subscriptions of various types without agreement from the consumer. The complaint for this class action alleges that Trusted Media Brands, Inc. (TMB) has violated this law by automatically renewing consumer subscriptions to its magazines.

The class for this action is all individuals in California who, within the limitations period, were enrolled by TMB in an automatic renewal or continuous service program.

Electronic payment methods have made it easier for consumers to buy goods and services, but they’ve also enabled what’s known as the “negative option,” where companies add charges to credit cards to continue purchases or renew subscriptions unless the customer specifically terminates them. 

As California’s Assembly Committee on Judiciary said, “consumers are often charged for renewal purchases without their consent or knowledge. For example, consumers sometimes find that a magazine subscription renewal appears on a credit card statement even though they never agreed to a renewal.” The ARL aimed to put a stop to those practices. 

However, some companies don’t seem to have understood this.

In October 2017, plaintiff Dane Tovey, who lives in San Diego County, signed up for a one-year subscription to Reader’s Digest. For this, he allowed TMB to make a charge of $10 to his credit card. However, without Tovey’s knowledge or consent, he was enrolled in a program that automatically renewed his subscription. He only discovered this when he found a charge on his credit card for $14.95, placed by TMB in August 2018.

The ARL requires certain things of companies making automatic renewal or continuous service offers:

  • They must present the auto-renewal or continuous-service offer terms in a clear and conspicuous manner before the agreement is fulfilled, in visual proximity to the request for consent to the offer. 
  • They may not charge the customers’ credit or debit cards or accounts for an auto-renewal or continuous service without first getting the customers’ affirmative consent to the agreement containing those specific terms.
  • They must provide an acknowledgement that includes the auto-renewal or continuous service terms, cancellation policy, and information on how to cancel, in a form that can be retained by the customer. If the offer includes a free trial, companies must disclose how to cancel and allow the customers to do so before they pay for the goods or services. The acknowledgement must include a toll-free number, e-mail address, or other means that can be used for cancellation. 

The complaint claims that TMB did not follow all of these requirements when it enrolled Tovey in its auto-renewal program. 

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