Contributed by: ElyseRomano Friday, October 19 2018 @ 11:42 am
Spark Networks USA, the Los Angeles-based parent company of numerous niche dating sites including Jdate and Christian Mingle, has agreed to pay $500,000 in penalties and up to $985,000 in restitution to customers after settling a consumer protection action. The money will be paid to users whose subscriptions automatically renewed without notification or who were denied refunds.
Under federal and California state law, consumers must be notified if a subscription is automatically renewed and must give their “express, affirmative consent” before any money is collected. Spark Networks failed to provide clear notification of subscription renewals, according to the settlement, and offered users no opportunity to indicate their consent via a check-box or similar form. The consumer protection action was pursued upon discovery of this violation.
“Consumers always have the right to know where their money is going and companies must comply with California’s laws in order to ensure that consumers understand certain transactions will renew automatically,” San Diego County District Attorney Summer Stephan said in a statement. “This joint effort is a great example of how our Consumer Protection Unit works to protect people from unfair business practices in the marketplace and ensure that California’s consumer protection laws are followed.”
The judgment was signed by a Los Angeles County Superior Court judge on October 3. In addition to the $500,000 in civil penalties (will be shared equally among all agencies) and the $985,000 repaid to members, Spark Networks must send consumers a clear summary of its renewal terms after they pay and must allow consumers to cancel easily. The company also agreed to change its website and sales practices to offer full transparency about the automatic renewal of memberships and provide better protection for consumers.
Californians who paid certain membership fees between May 26, 2012 and Oct. 10, 2017 will be able to seek reimbursement if they were charged for at least one automatically renewed cycle without their knowledge and consent. Customers are also eligible for restitution if they previously requested cancellation of an auto-renewal service plan and were denied. Each eligible recipient will receive a restitution check for $25 unless the total restitution claimed exceeds $985,000. The per-person amount will be reduced if that threshold is reached.
A similar group of prosecutors that included the Santa Monica City Attorney obtained a $2.2 million judgment against eHarmony in January 2018 for automatic-renewal violations.
“Automatic renewal is one of the critical areas in consumer protection today,” said Chief Deputy City Attorney Adam Radinsky, head of Santa Monica’s Consumer Protection Division. “Consumers always have the right to know where their money is going.”
"The Santa Monica City Attorney’s Office is committed to protecting consumers from unfair and unlawful business practices. This joint effort is an important victory to ensure that consumers will not be subject to recurring charges without their clear consent,” added City Attorney Lane Dilg.