A dating website has settled an effort by the California Auto-Renewal Task Force (CART) to bring transparency to its subscription process.
The Match Group, Inc., which includes PlentyofFish, OkCupid and Tinder, agreed to pay $2 million in civil penalties and costs as part of the settlement of a lawsuit filed in Santa Cruz County alleging it prevented members from easily cancelling their subscription.
“The $2 million will cover all relevant civil penalties and investigative costs associated with the action,” said Nicole Clark, an attorney, and CEO of Trellis Research. “It will not cover attorneys’ fees.”
The consumer protection lawsuit was filed by the Offices of the District Attorney, which include Los Angeles, San Diego, Santa Barbara, Santa Clara, Santa Cruz along with the City of Santa Monica.
“The amount seems small,” Clark told the Southern California Record. “I am more interested in the amounts slated for applicable customers from the victim restitution fund. It is still unclear how high this figure will be. However, the class of customers eligible for this restitution payment is very narrowly defined. I wonder about those individuals who will fall through the cracks, maybe because they didn’t know they could request a refund or because they don’t technically qualify as a California consumer.”
The next step is for Match Group to create a list of the names of all eligible recipients who will receive a cash restitution payment of $25.
“The lawsuit is less a financial shakedown than it is an opportunity to clarify the provisions of California’s automatic renewal and dating services contract laws," Clark said.
The settlement includes a victim restitution fund, which is in addition to the $2 million.
“The program will reimburse certain subscription renewal fees paid by any California consumer who entered into a contract with Match Group and was subsequently denied a refund after an automatically-renewed subscription cycle,” Clark said. “The settlement agreement of $2 million is far less than the $10 million originally requested by the district attorneys.
The complaint alleged that the online dating service subscriptions did not comply with CART provisions and contract laws pertaining to dating services by not gaining consent when they automatically enrolled customers in renewing the services when consent is required by law, according to media reports.
“The settlement clarifies the elements of an automatic renewal plan that will keep companies compliant with the law,” Clark said.
For example, it specifies the size of the font for specific parts of the contract, includes requirements for ease of use cancellation policies, and instructs on how to inform existing customers about upcoming subscription renewals.
“The settlement, in other words, sets out what it means to ensure the relationship between the service provider and the customer is predicated on informed consent,” Clark said. “Financially, for other companies who are involved with automatic renewal plans, the settlement establishes a standard from which they can negotiate similar settlements in the future.”
While Match denied further allegations that it failed to instruct clients how to cancel and provided for a difficult cancellation function, Santa Barbara County District Attorney Joyce E. Dudley alleged in a statement online that consumers were harmed because they were prevented from executing informed decisions about where they spent money.
"This lawsuit is a perfect example of the messy complexities that can arise when laws enter the real world," Clark added. "Terms that we take for granted are now open to new legal interpretations. The judgment outlines clearly what the Match Group, and other similar service providers, will need to do in order to stay compliant with this law."