The virtual pet website Neopets is being sued for $5 million in a class action lawsuit over allegations that the company violated California law by automatically renewing customer memberships. The lead plaintiff known as John Doe filed the Neopets class action lawsuit after discovering that the virtual pet subscription continuously renewed customer accounts yet failed to make it known in a discernible way.
Neopets, Inc. offers consumers a virtual pet experience through a website located on the Neopets.com domain. Several companies that are automatically billing consumers continue to ignore the California Automatic Renewal Law. Neopets, Inc., is the latest online outfit to fail to follow the law and face a class-action lawsuit.
Under this law, a party automatically billing California citizens on a continuous basis must :
- Present the automatic renewal offer terms in a clear and conspicuous manner before the consumer agrees to take the requested billable action and in visual proximity to the request for consent to the offer.
- Charge the consumer’s payment resource only after first obtaining the consumer’s affirmative consent to the agreement containing the automatic renewal offer terms.
- 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.
The Neopets class action lawsuit states that the definition of clear and conspicuous means the automatic renewal information should have been “in larger type than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same size, or set off from the surrounding text of the same size or in a manner that clearly calls attention to the language.” Instead of making it very clear that this was an automatic renewal, Doe claims that at the very bottom of the website page it states (in small print) that “For your convenience, after your current membership period ends, your membership will be automatically renewed using your credit card or PayPal account on file.”