Thrive Market will pay $1.55 million to settle a civil lawsuit alleging the e-grocer violated the California Automatic Renewal Law and False Advertisement Law, according to the Los Angeles County District Attorney’s Office.
The California Automatic Renewal Task Force (CART) investigated the membership-based online specialty grocer for violating a state law that prohibits companies from automatically renewing consumers’ subscriptions without “clearly and conspicuously disclosing the subscription terms or without their affirmative consent.”
In addition to the more than $1 million settlement, Thrive Market will also comply with additional terms:
- “Clearly and conspicuously disclose its automatic renewal terms;
- Obtain consumers’ affirmative consent to the terms through a checkbox before charging for an automatic renewal subscription;
- Email consumers a confirmation of the transaction that includes the automatic renewal terms after they pay;
- Allow consumers to cancel their subscription online at will; and
- Avoid making misleading statements regarding its subscription and products.”
“This case highlights a flagrant violation of consumer rights and ethical business practices,” Los Angeles County District Attorney George Gascón said in a statement. “Automatic renewal without explicit consent undermines the fundamental principle of transparency and fairness in consumer transactions.”
Thrive Market did not admit wrongdoing, was cooperative in CART’s investigation and has begun corrective measures, per the press release.
“While we believe that our membership model was clear to our members upon joining Thrive Market, a group of California District Attorneys felt we could do better,” a spokesperson for Thrive said in a statement to sister publication Grocery Dive. “As a result, we’ve addressed their concerns on the website and taken steps to call attention to and explain our membership model in greater detail during the signup flow.”
