June 1, 2023

Class Action Lawsuit Relies on California's Automatic Renewal Law (ARL)

The Defendant is Fenix Internet and its “Only Fans” Website

On April 20, 2023, attorneys for a class action against Fenix Internet and its “Only Fans” website filed a Notice to remove the case to a U.S. District Court.

The lawsuit relies on California's Automatic Renewal Law (ARL) that regulates subscriptions.

Damages are alleged to be “at least $5,760,000”.

Alleged ARL Violations

The complaint alleges ARL violations, including Only Fans failure:

    *  To provide clear and conspicuous information regarding the terms of its subscription offerings;

    *  To provide the terms at all during the entire sign-up process;

    *  To provide the complete subscription offer terms in a clear and conspicuous manner and in visual proximity to the request for consent prior to the purchase; and

    *  To provide a post-purchase acknowledgment to users that include the subscription offer terms, describes the cancellation policy, and explains how to cancel.

In addition, the plaintiffs allege that Only Fans employed deceptive "dark patterns" by making its subscription cancellation process difficult for consumers to navigate and complete.

ARL is More Strict than FTC Approach

There are two specific alleged ARL violations that are more strict than current FTC guidelines and rules.

    *  The requirement for a one-step "prominently located" cancellation button or link is available to users on their profile or account settings.

    *  The requirement for an "immediately accessible" pre-written cancellation email to easily cancel the subscription.

Takeaway

Except for the two alleged ARL violations that are more strict than the FTC approach, the Only Fans case is typical of the growing number of cases alleging numerous violations of federal and state laws regulating subscriptions.

The FTC is aggressively using its Rulemaking process to add additional, more restrictive requirements for subscription marketers.

The Compliant also contained a “pithy” statement that really resonated with me regarding my own experience with difficulty in subscription cancellations: the “real money is in the inertia” (quoting a Washington Post article).

Marketers should understand that strict compliance with federal and state subscription guidance and regulations is essential.