Facts

A task force of county and city attorneys throughout California sued Guthy-Renker LLC relating to the business' automatic renewal terms for rollover subscriptions.

PLAINTIFFS' CONTENTIONS: Plaintiffs contended that Guthy-Renker was not clearly disclosing its automatic renewal terms for rollover subscriptions before consumers purchased its ProActiv acne and Wen hair products, or obtaining customers' affirmative consent before automatically renewing their payments and subscriptions.

DEFENDANT'S CONTENTIONS: Guthy-Renker denied the allegations, and contended it has always fully disclosed automatic renewal terms to consumers.

Result

Guthy-Renker agreed to present the terms of automatic renewal or continuous service offers to California consumers in a clear and conspicuous manner before payment information is obtained, in visual proximity to the request for consent to the offer. Further, Guthy-Renker agreed to obtain affirmative consent of California consumers to automatic renewal offer terms, and provide at least one post-payment acknowledgment of the transaction clearly and conspicuously stating the automatic renewal offer terms, cancellation policy, and information regarding how to cancel via a simple mechanism. Guthy-Renker also agreed to pay the People civil penalties of $1 million, $200,000, along with payment to the People of $75,000 in investigative costs and to pay restitution to former customers of at least $1 million, up to a maximum of $7.3 million.