CoFoundersLab.com Charges Consumers for Unwanted Monthly Subscription Plans, Class Action Says

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A proposed class action claims the company behind CoFoundersLab.com unlawfully enrolls consumers in reoccurring, paid subscriptions without consent.

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The 17-page lawsuit says defendant CFLAB, LLC, whose online platform allows users to connect with potential start-up business co-founders, offers several paid subscription services to access its “premium” website features. However, in violation of the federal Electronic Funds Transfer Act, the company fails to provide clear disclosures and obtain affirmative consent before enrolling CoFoundersLab.com users into automatically renewing subscription plans, the case alleges.

The plaintiff, a Michigan resident, says he signed up for a 30-day free trial of CoFoundersLab’s “Launch” program in March 2023. Then, in April 2023, the man was surprised to see that the defendant had automatically enrolled him in a recurring Launch program membership and charged him the monthly $89 subscription fee, the suit shares.

“Nowhere on the sign-up page is it stated that the Launch program will automatically renew each month after the thirty day [sic] trial, nor does the sign-up page inform users that Defendants will automatically charge their credit or debit cards,” the filing says.

The complaint also says that CoFoundersLab fails to provide consumers with an acknowledgment that includes its automatic renewal offer terms, cancellation policy and information about how to cancel the subscription “in a manner that is capable of being retained by the consumer.”

According to the suit, the plaintiff has attempted to cancel his Launch program membership multiple times, but CFLAB has allegedly refused to honor the man’s cancellation requests and continues to charge him $89 each month.

As the case tells it, many consumers have posted complaints online detailing experiences similar to the plaintiff’s. For example, the lawsuit points to a “plethora” of negative Google reviews from individuals who say they were unknowingly enrolled in the defendant’s Launch program and then billed for months after canceling their subscriptions.

The complaint notes that marketing tactics like automatic renewals and free-to-pay conversions—referred to as “negative option arrangements” by the Federal Trade Commission—have become a “persistent source of consumer harm” as companies use deceptive practices to “[saddle] shoppers with recurring payments for products and services they did not intend to purchase or did not want to continue to purchase.”

As such, federal law prohibits companies from charging consumers for online purchases effected through a negative option feature unless they present their offer terms “clearly and conspicuously,” obtain consumers’ prior express consent and provide consumers with “simple mechanisms” for cancellation, the suit relays.

“[The defendant’s] negative option sales scheme failed to satisfy all three prongs, any of which is fatal and unlawful,” the filing contends.

The lawsuit looks to represent anyone in the United States whose bank accounts were debited on a reoccurring basis by CFLAB, LLC without obtaining a written authorization signed or similarly authenticated for preauthorized electronic fund transfers within the past year.

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