Class Action Against YP Holdings, Dex Media Alleges Violations of CA’s Automatic Renewal Law

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The operator of a Ventura County, California preschool has filed a proposed class action against YP Holdings, LLC; YP, LLC; and Dex Media over alleged violations of the state’s automatic renewal law. According to the case, the defendants automatically renewed service agreements with consumers throughout California without presenting, among other disclosures, the terms governing the arrangements in a “clear and conspicuous manner and in visual proximity to the request for consent to the offer.” The suit further claims the defendants charged proposed class members' credit and/or debit cards without first obtaining affirmative consent to the automatic renewal terms.

California’s automatic renewal law calls for specific disclosures to be made before a business can automatically renew or continue to offer a service, the lawsuit states. The suit specifies that the legislation makes it unlawful for businesses in California to:

(1) Fail to present the automatic renewal offer terms or continuous service offer terms in a clear and conspicuous manner before the subscription or purchasing agreement is fulfilled and in visual proximity, or in the case of an offer conveyed by voice, in temporal proximity, to the request for consent to the offer.

(2) Charge the consumer's credit or debit card or the consumer's [sic] with a third party for an automatic renewal or continuous service without first obtaining the consumer's affirmative consent to the agreement containing the automatic renewal offer terms or continuous service offer terms.

(3) Fail to provide an acknowledgment that includes the automatic renewal or continuous service offer terms, cancellation policy, and information regarding how to cancel in a manner that is capable of being retained by the consumer. If the offer includes a free trial, the business shall also disclose in the acknowledgment how to cancel and allow the consumer to cancel before the consumer pays for the goods or services.

The defendants, who the case says sell advertising subscriptions to small business owners across the country, allegedly checked off the three above-described boxes before renewing their business arrangement with the plaintiff. 

“Without [the plaintiff’s] consent, [the defendants] renewed the contract and when [the plaintiff] advised she never consented to such renewal [the defendants] ignored her, billed her and threatened collections on her,” the lawsuit reads. “Reserving her rights and without waiving them, [the plaintiff] made a payment to [the defendants].”

This lawsuit has been removed from superior to district court in California.