Beachbody fined over automatic renewals
Probe found the firm was applying recurring charges without legal consent of customers. ‘ This is an important victory to ensure that consumers will not be subject to recurring charges imposed without their clear approval and consent.’ — Lane Dilg, Santa
Beachbody, the Santa Monica fitness brand behind popular exercise regimens such as P90X, agreed to pay $ 3.6 million and change its sales practices after an investigation found it was applying recurring charges to customers without their legal consent.
The maker of exercise videos, supplements and weight- loss programs was found to have charged customer credit cards automatically for subscription renewals, sometimes after so- called free trials.
Under a judgment Monday by Judge Mitchell L. Beckloff of the Santa Monica Superior Court, Beachbody will have to disclose renewal terms, provide a checkbox for customers’ consent, allow easy cancellations and send reminders of upcoming renewals.
Beachbody, which has 23 millions customers, said it has already invested in improving its digital platforms for customers and welcomed the order to make changes to its business.
“Customers can and should expect a transparent purchase process with us, one that clearly lets them know exactly what they are buying and when,” Jon Congdon, co- founder and president of Beachbody, said in a statement. “At the same time, operating directly with the consumer, we have always provided an industryleading money back guarantee on all our products and services so our customers feel secure purchasing from Beachbody.”
The Santa Monica city attorney’s office said the judgment was a win for consumers.
“The Santa Monica city attorney’s office is committed to protecting consumers from unfair and unlawful business practices,” said Santa Monica City Atty. Lane Dilg. “This is an important victory to ensure that consumers will not be subject to recurring charges imposed without their clear approval and consent.”
Automatic renewals have proven highly profitable to businesses because consumers often aren’t aware of them or forget to cancel them after a free trial.
The city attorney’s office believes the injunction involving Beachbody is the first in California requiring a separate online checkbox to ensure customers know they’re signing up for a product or service with automatic renewals.
The city is also requiring Beachbody to provide reliable scientific studies to back its health claims. Prosecutors say the company made false or misleading claims about products aimed at f ighting aging, inf lammation and mental decline.
The city attorney’s office said the judgment is the result of an undercover investigation, consultation with scientific experts and negotiations with Beachbody’s attorneys that lasted more than two years.
Beachbody agreed to pay $ 2.6 million in penalties and $ 1 million in restitution to non- profit groups advocating community health and nutrition.