SANTA MONICA—On Monday, August 18, the Los Angeles County District Attorney’s Office announced that HelloFresh, the world’s largest meal kit delivery company, was ordered by the Court to pay $7.5 million to settle a civil lawsuit alleging the company violated California’s Automatic Renewal Law by deceptively enrolling consumers into auto-renewing subscription plans without proper disclosure or consent.
The lawsuit, jointly led by the Los Angeles County District Attorney’s Consumer Protection Division and the Santa Clara County District Attorney’s Office, alleged that HelloFresh misled California consumers into ongoing subscription charges without adequate notice or authorization.
The civil complaint alleged that HelloFresh failed to:
• Clearly and conspicuously disclose its subscription terms before collecting payment;
• Obtain consumers’ affirmative consent before charging their credit or debit cards;
• Provide a post-transaction acknowledgment containing the material terms of the subscription; and
• Offer an easy-to-use mechanism for cancellation.
The practices allegedly resulted in consumers being unknowingly enrolled in ongoing payment plans that were difficult to terminate.
The case is one of the ongoing investigations conducted by the California Automatic Renewal Task Force (CART). CART was established by the LADA’s Office in 2015 to address rising consumer complaints about subscription-based traps.
In addition to the Los Angeles County District Attorney’s Office, CART includes the district attorney’s offices of Santa Barbara, Santa Clara, Santa Cruz, and San Diego, and the Santa Monica City Attorney’s Office.
The HelloFresh case was filed in the Santa Clara County Superior Court. Under the final judgment, signed by Judge Daniel T. Nishigaya and entered Monday, where HelloFresh was ordered to pay:
• $6.38 million in civil penalties, divided among the prosecuting agencies.
• $120,000 in investigative costs; and
• $1 million in restitution to be distributed to eligible California consumers.
HelloFresh, which occupies approximately 75 percent of the U.S. meal kit delivery market, is headquartered in Germany. The company did not admit liability in the settlement.
By Danny Jones