Recurring charges

Spotify, the Sweden-based company was hit with a lawsuit recently for charging a customer monthly without her consent. A Spotify customer who recently upgraded her account, states that she did not give consent for recurring charges to her credit card. At the initial upgrade, customers are awarded a free month prior to being charged. Customers are informed at this time that if they do not cancel their subscription after the first month, their credit card on file will then be charged. Subscriber Melissa Bleak, “claims that automatic renewal charges to her premium account violate a California law requiring affirmative consent”.

While Spotify has not commented, at the time of upgrade customers are informed that until they cancel their premium account, they will be charged $9.99 per month to the credit card on file. When signing up for the free trial, customers are authorizing Spotify to bill their credit card each month, if they do not cancel after the initial month. However, the lawsuit states that this is not enough in terms of notification of policies. In the premium plan notice, their is no link to the terms of use and the terms are not referenced at all. Spotify fails to provide customers with a “check box”, which would give their official consent to bill their credit card.

It seems like this would be an easy fix for Spotify to get them out of hot water. Plenty of music and movie streaming companies provide initial free trials of their services prior to charging customers credit cards. It might have been helpful to take a page out of their books prior to finding themselves served with a lawsuit. Spotify continues to expand rapidly, happy customers will continue to make this happen.