Fury over Kate Hudson’s Fabletics ‘scam’
‘Social media is awash with complaints’
IT PROMOTES itself as the celebrity discount website offering thirtysomething women an affordable way to be part of the growing ‘athleisure’ trend – workout clothing that looks as good on the street as it does in the gym.
But now actress Kate Hudson’s company Fabletics has been reported to Trading Standards by irate customers who claim they have been ripped off by hidden charges and say they are considering suing the company en masse for compensation.
Hudson, the 36-year-old daughter of Hollywood star Goldie Hawn, is a co-founder of the company and features prominently on its website and advertising campaigns, encouraging buyers to ‘shop outfits from my closet’.
Fabletics, which is based in America but launched in Britain two years ago, is owned by the parent company JustFab, which is valued at $1billion (£700 million). The company offers shoppers discounts of up to 50 per cent if they sign up for so-called ‘VIP membership’. But many dissatisfied customers claim they have been duped into taking VIP membership without realising they are actually agreeing to an ongoing subscription of £44 a month.
While it is stated in the site’s terms and conditions, furious shoppers claim the fee was not made obvious to them. Furthermore, they say, the only way members can avoid the monthly charge is by remembering to opt out of the payment within the first five days of every month. Since complaints began, the firm has started to display its terms and conditions more prominently.
Campaigners say the practice of automatically charging every month for something you might not want – known as ‘inertia selling’ – is in breach of British consumer law.
One Fabletics customer, Danielle Cohen, 48, from Totteridge, North London, explained how she inadvertently ended up paying the monthly fee. ‘I was looking for some new workout gear and had seen lots of nice things on the Fabletics website,’ she said.
‘The blurb said if I joined their “VIP club”, I could make my first purchase for £22 instead of £44.’
Danielle was happy with the goods, but didn’t realise for nine months that in return for the 50 per cent discount on her first – and only – purchase, she had agreed to pay £44 every month in return for ‘credits’ that could be spent on the website at a later date.
‘I made my original purchase via PayPal and the payments were identified on my bank statements as being paid to PayPal,’ she added. ‘I use the service a lot and for this reason I didn’t notice £44 a month being deducted. Last October, however, I went through my monthly outgoings on my PayPal statement, noticed this amount and rang to report it as potentially fraudulent. It was at that point PayPal told me I’d been paying this sum every month – for the past nine months – to a company called JustFabUK Ltd, even though I’d received no goods.
‘I had no idea who this was, but PayPal identified them as being Fabletics. They told me complaints like mine happened often among their customers. I was gobsmacked. I’m not stupid, I’m an account director in a large company. Whatever I signed must have appeared really innocuous.’
Cancelling the membership is not an easy process, either. Shoppers complain of continuing to be charged after telling the firm they no longer want VIP membership.
‘When I contacted Fabletics about my “membership”, they were bullish,’ says Danielle. ‘I was on the phone to them for an hour, and in the end I got five of my eight credits refunded.’
Social media sites are awash with Fabletics ‘members’ complaining they didn’t realise they had signed up to a monthly scheme. Review sites also carry scathing verdicts on the brand’s selling tactics from customers. Some say they have been encouraged by trading standards experts to mount a class action for compensation.
Another cause for concern is a one-hour countdown timer Fabletics use to encourage people to buy before the ‘half-price deal’ is no longer available. Critics claim this breaks British consumer rules, which ban sales techniques designed ‘to deprive consumers of sufficient opportunity or time to make an informed choice’.
Last December, JustFab UK Ltd was reported to the Advertising Standards Authority for this practice and, after admitting liability, the brand claim they ‘worked with the ASA to resolve the complaint informally and without a formal investigation or ruling’. A countdown timer, however, remains in operation on their website.
Sylvia Rook, a lead officer for fair trading and trade descriptions at the Chartered Trading Standards Institute, said: ‘Businesses should always be transparent about what customers will be charged and when. If they fail to do so, they could face enforcement action.’ A Fabletics spokesman said: ‘Fabletics provides customers with multiple explanations of the membership model. First-time customers are required to confirm that they understand the VIP Membership Programme terms and conditions, by checking a tick box prior to registration.’