In recent years, subscription services have come under close scrutiny from regulatory bodies. In many cases, this is because of their failure to disclose how to cancel, or when subscriptions are renewed. In this class-action suit, plaintiffs allege that BarkBox, a reseller of dog treats, toys, and chews that delivers monthly pet entertainment boxes to subscribers, is not in compliance with the California automatic renewal law. That law says that if consumers are not properly notified of the renewal policy and do not affirmatively consent to it, the additional boxes received are considered “unconditional gifts” and a consumer will not be responsible for canceling a plan or for the cost of the goods. The lawsuit also accuses BarkBox of false and deceptive advertising. Let’s see if the “bark” of these former clients is worse than the “bite” of the law.
BarkBox sells subscriptions lasting one, three, six, and twelve months. Customers are incentivized to make larger purchases, since more boxes mean bigger discounts. Subscriptions are sold on the BarkBox website, where the automatic renewal policy is disclosed in a pale gray font at the very top of the site. On the payment page, there is another statement in pale gray text that requires buyers to click the box to agree to the terms and time of payment, without mention of the automatic renewal.
Amber Farmer joined a class of consumers in California that filed suit against Barkbox, Inc, alleging that the service violated California’s automatic renewal law by not properly disclosing the terms of the subscription service or obtaining affirmative consent to enroll customers. Farmer signed up for what she thought was a six-month supply of Bark Boxes, but was charged for more at $25 per box, and then could not opt out of the rest of the boxes she received. She joined a class of consumers alleging that Bark Box violated the California ARL, and that the inconspicuous disclosure on the company’s website was tantamount to false and deceptive advertising.
How Are Consumer Surveys Used in Class Actions for False and Deceptive Advertising?
This case is still in the initial stages, but we see a number of ways that consumer surveys could be used in this litigation, depending on the plaintiffs’ legal arguments. For example, a false advertising survey could measure consumer perceptions of the allegedly insufficient disclosures on the BarkBox website. For assessing damages, a consumer survey could also be designed to measure how much consumers would pay to not be automatically subscribed to the service.
False and deceptive advertising laws, including the automatic renewal law, are intended to protect consumers from unfair sales tactics and practices. If you are employing subscription-based sales strategies, be sure that your practices are fair and not confusing–or risk regulators and unhappy customers taking a bite out of your profits.
MMR Strategy Group designs surveys for false and deceptive advertising matters that measure consumer understanding of all kinds of messaging, including online communications. If you require consumer research in a false or deceptive advertising litigation, contact MMR Strategy Group.