Kobach obtains settlement with online retailer
Topeka–Kansas Attorney General Kris Kobach today announced a $1 million multistate settlement with TFG Holding, Inc., an online clothing retailer that offers shoes, clothing, and accessories through JustFab, ShoeDazzle, and FabKids. The settlement resolves claims that the company deceptively marketed its VIP Membership Program to consumers and then made it difficult for consumers to cancel their memberships.
“Online retailers are in a unique position to prey on consumers unfamiliar with misleading marketing intended to ensnare the consumer into a never-ending membership. The Kansas Consumer Protection Act protects Kansans from deceptive claims, including the right to affirmatively consent to a membership and easily cancel a subscription,” said First Assistant Attorney General Melanie Jack.
The Kansas Attorney General’s Office alleged that TFG Holding, Inc., violated Kansas law by:
- Enrolling costumers — without their consent, knowledge or authorization — into a membership program with a recurring charge;
- Implementing cancellation policies that limited consumers’ ability to cancel; and
- Misrepresenting the price consumers could expect to pay for products advertised on the company’s website
Under the terms of the settlement, TFG Inc., is required to clearly disclose the terms of its membership program, obtain consumers’ express consent before enrolling them into the VIP Membership Program, provide a simple online mechanism for cancelling memberships and promptly cancel memberships once a consumer requests a cancellation and refrain from representing sales and offers as time sensitive when they are not.
Additionally, the company will pay $1 million to the jurisdictions in the multistate investigation. Certain customers will receive notice if they are eligible for restitution. Kansas also will receive civil penalties for the consumer protection training and education fund.