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Joanna Rosen Forster

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On August 26, 2024, the FTC announced a stipulated order and settlement with Care.com for 8.5 MM.  The complaint, filed in W.D. Tex. alleges various violations of Section 5 of the FTC Act and the Restore Online Shoppers Confidence Act with respect to the manner in which Care.com advertised and promoted the number of jobs available on its platform, and its auto-renew or subscription feature.  The FTC labeled Care.com’s subscription cancellation flow a “dark pattern”; it is hard to locate, and, once found, consumers must “navigate a multipage process rife with deceptive design tactics”.  The conclusion, per the FTC is that Care.com just doesn’t want users to be able to cancel.  In the stipulated order, the parties agreed that: Continue Reading The FTC and “Cancel Culture”

Federal Trade Commission
The building of the Federal Trade Commission in downtown Washington DC.

Call it the summer of junk fees and drip pricing. In July, California’s new drip pricing law went into effect and in August the federal government announced further proposed rules into junk fees and subscription services. Regulators say these proposed price transparency laws and regulations are consumer protection tools that will save consumers money, help them avoid hidden fees and enable them to cancel recurring charges and subscriptions.

Here is what you need to know now:

Continue Reading Turning up the Heat on Junk Fees and Drip Pricing: Federal and State Regulations Require Increased Transparency into Pricing and Contract Cancellation

As we’ve previously reported, FTC practitioners and businesses alike have been anxiously awaiting details about the rule that will prohibit purportedly deceptive practices in connection with reviews and testimonials. Our readers likely recall the FTC’s advance notice of proposed rulemaking from November 2022, the notice of proposed rulemaking from June 2023, and the informal hearing on the proposed rule which occurred in February 2024. The wait is finally over: just yesterday, August 14, 2024, the agency announced the “Rule on the Use of Consumer Reviews and Testimonials” (the “Rule”). The final Rule, which the Commissioners unanimously approved, is a formal step to address alleged ongoing non-compliance with Section 5 of the FTC Act and the agency’s Guides Concerning the Use of Endorsements and Testimonials in Advertising (the “Endorsement Guides”), particularly in the consumer review space.Continue Reading Final Rule Announced: The FTC Strengthens Its Enforcement Capacity Against “Deceptive” Reviews and Testimonials

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Gone are the days of hidden fees and tacked on surcharges in California. Starting July 1, 2024, SB478 prohibits businesses in California from adding automatic service charges onto consumer bills. The law applies to the sale or lease of most consumer goods, including hotel and restaurant fees.

Significantly, the laws requires transparency in the advertised price. This means that businesses must disclose all costs and fees upfront – no more surprises in your shopping cart before checkout, or that mandatory “large group” fee at restaurants. It’s not even enough to disclose all the fees before the consumer finalizes the transaction or hits “buy”. The total cost must be the advertised price, disclosed at the top of the funnel. Some exceptions apply, but they are limited to items such as mandatory sales tax, shipping and voluntary tips. Penalties are stiff: consumers can bring claims against businesses, with a max of $1,000 per violation, and consumers can recover attorneys’ fees.Continue Reading California Is Tightening the Pipes on Drip Pricing