Settles Consumer Protection Lawsuit with Local Prosecutors’ Offices

March 5, 2021 11:15 AM

PeopleConnect, Inc., the owner of the popular social networking site, will pay up to $550,000 to settle a consumer protection lawsuit filed by the California Automatic Renewal Task Force (CART). The lawsuit alleged that’s website failed to comply with statewide disclosures requirements that apply to automatically-renewed subscription charges. The CART team consists of the Santa Clara and San Diego District Attorney’s Offices, which took the lead in filing the case, along with the Santa Monica City Attorney’s Office, and the District Attorney’s Offices of Los Angeles and Santa Cruz counties.

The lawsuit alleged that Classmates failed to abide by the following legal requirements:

Under California law, online businesses must clearly and conspicuously disclose all automatic renewal charges and terms and get the affirmative consent of those recurring charges from the consumer before charging the consumer. Companies must also provide a clear acknowledgement of those terms and information on how to cancel, as well as provide a way for consumers to cancel easily online.

PeopleConnect, Inc. will pay $400,000 in civil penalties and costs, and up to $150,000 in restitution to customers whose payments were automatically renewed without their consent. The company will send out restitution notices by email to eligible consumers. 

The company cooperated with the investigation and is in the process of changing its website to comply with California’s auto-renewal requirements. It will display its automatic renewal terms more clearly and obtain the consumer’s consent by requiring the consumer to affirmatively check a separate checkbox or similar mechanism before charging the consumer any automatic renewal or continuous service. 

San Diego Superior Court Judge Ronald L. Styn entered a final judgment on the parties’ stipulated settlement on March 1, 2021, in People v. PeopleConnect, Inc. dba, Case No. 37-2020-00043918-CU-BT-CTL.


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