Holiday consumer alert – watch out for those VIP membership clubs — the ones that automatically charge monthly fees to your credit card. Those membership clubs may not live up to their promises and can make it hard to cancel membership.
AdoreMe membership not so adorable
Recently, online lingerie retailer AdoreMe reached a settlement of FTC charges that it deceived consumers who enrolled in its online membership program about amounts that would be credited to their accounts and made it hard for consumers to cancel their memberships.
According to the FTC, AdoreMe’s “VIP” members were automatically charged $39.95 each month, which they could use to purchase items at discounted prices. VIP members were told they had a “negative option,” under which they would not be charged $39.95 for the month if, in the first five days of each month, the member bought something or clicked an online button to “skip” buying that month. According to the FTC, the company’s website stated, “If you do not make a purchase or skip the month by the 5th, you’ll be charged a $39.95 store credit that can be used anytime to buy anything on Adore Me.”
Adore Me did not always deliver the promised “anytime” store credits. According to the FTC, from at least May 2015 to May 2016, Adore Me took unused credit amounts away from members who cancelled their memberships or initiated chargebacks with financial institutions to dispute company charges.
You can check in, but you can never leave
Under the Restore Online Shoppers Confidence Act, retailers must provide consumers with a simple mechanism to stop recurring charges like these. The FTC alleges that for several years Adore Me made it hard to cancel memberships, by limiting how consumers could submit cancellation requests, by under-staffing its customer service department, and by putting consumers through drawn-out cancellation request processes.
Under the FTC settlement, AdoreMe will pay $1.37 million that will be used to repay members. The case was filed in the U.S. District Court for the Southern District of New York. You can get more information here:
Lisa Bragança represents whistleblowers, recovers losses for investors, obtains insurance coverage for policyholders, and represents individuals and firms in government investigations. Lisa blogs on consumer and investment fraud. You can reach Lisa at (847) 906-3460 or BragancaLaw@gmail.com.