Facts

Lavender Lingerie, LLC dba Savage X Fenty is a Delaware limited liability company with its principal place of business located in Los Angeles. Savage X Fenty offers and sells lingerie and clothing products to members of the public, including California, via the internet. Savage X Fenty's website would advertise reduced prices for its products, but these prices were only available if consumers enrolled in the company's VIP membership program. In theory, the VIP program gave consumers access to the aforementioned reduced pricing as well as the opportunity to earn store credit, which consumers were told they could use at any time, in exchange for a monthly recurring membership fee. But in actuality, when consumers purchased products from Savage X Fenty's website, it would automatically add a recurring paid VIP membership into the shopping bag. On August 9, 2022, the People of the State of California filed a complaint against Savage X Fenty seeking an injunction, civil penalties, and other relief.

PLAINTIFF'S CONTENTIONS: Plaintiff contended that defendant's actions violated unfair business practices laws. First, defendant advertised reduced prices on its website without clearly and conspicuously informing consumers they had to enroll in the VIP membership. Also, defendant advertised that store credit offered by its VIP membership could be used at any time when it could only be used with a purchase greater than the value of the credit. Moreover, plaintiff automatically added the VIP membership to consumers' shopping bags causing their credit cards to be charged repeatedly until canceled by consumers. Plaintiff also failed to properly disclose the renewal plan's material terms and conditions on its website. Other practices violating consumer protection statutes included defendant failing to disclose legally required terms clearly and conspicuously in proximity to a request for the consumer's consent to the plan; failing to obtain the consumers' affirmative and express informed consent before obtaining billing information and payment; failing to provide post-payment acknowledgment of the required terms; and failing to provide a simple online mechanism to cancel the recurring charges.

DEFENDANT'S CONTENTIONS: Defendant denied any wrongdoing or liability.

Result

The court entered a stipulated judgment that required the defendant to pay $1 million in civil penalties, $50,000 in investigative costs, and $150,000 in restitution.