Spark Networks USA, the company behind niche online dating sites like Christian Mingle and Jdate, has settled a consumer protection action filed by San Diego, Los Angeles, Santa Clara, and Santa Cruz counties on behalf of customers who were automatically renewed for the service and denied refunds.
The company will pay $500,000 in civil penalties and almost $1 million in restitution, distributed to users and the municipalities, including the city of Santa Monica. Here's a closer look.
Where There's a Spark...
"Consumers always have the right to know where their money is going and companies must comply with California's laws in order to ensure that consumers understand certain transactions will renew automatically,'' San Diego County District Attorney Summer Stephan announced. "This joint effort is a great example of how our Consumer Protection Unit works to protect people from unfair business practices in the marketplace and ensure that California's consumer protection laws are followed.''
Spark Networks was allegedly automatically renewing users without telling them, in violation of state and federal laws requiring consumers be notified if a subscription is renewed. Under the terms of the settlement, Christian Mingle, Jdate, and all of Spark's other dating sites will be required to clearly and conspicuously disclose all renewal terms, including getting a customer's consent, via a separate check box (or similar mechanism) that does not include other terms and conditions, and sending a clear summary of the renewal terms after consumers pay. Transparency provisions will also allow users to easily cancel subscriptions.
Prosecutors noted that online "subscriptions'' and other automatically recurring charges have proliferated in recent years, and that many online businesses don't follow federal and state law requiring them to obtain "express, affirmative consent" before collecting any money and making auto-renewals clear to consumers. Additionally, many of these charges follow "free trials" that require consumer cancellation to avoid future charges.
Be sure to read any terms and conditions of free trials and subscriptions carefully before agreeing.