News Releases

March 3, 2021: Settles Consumer Protection Lawsuit

Pamela J. Johnson, Public Information Officer
(213) 257-2000

Los Angeles County District Attorney George Gascón announced today that PeopleConnect Inc., which runs the social networking site, will pay $400,000 in penalties and up to $150,000 in restitution to settle a civil lawsuit alleging the company charged customers for automatic renewal without their express consent.

“This case serves as another reminder that companies are required by law to disclose automatic subscription renewals. We will enforce consumer laws designed to protect individuals from unscrupulous businesses trying to take their money,” District Attorney Gascón said. “Our consumer protection team will continue to work with other agencies to ensure companies comply with these crucial federal and state laws.”

Prosecutors also alleged that the company’s post-payment acknowledgment failed to supply a toll-free telephone number, email address or other timely and easy-to-use mechanism for cancelation – also a violation of the automatic renewal law – and that some consumers complained that it was difficult to cancel.

Headquartered in Delaware, the company was ordered to comply with the settlement terms to:

  • Clearly and conspicuously disclose its automatic renewal terms
  • Get consumers’ affirmative consent to the terms through a checkbox or similar mechanism before charging for an automatic renewal or continuous service
  • Email consumers a confirmation of the transaction after they pay, which clearly includes the automatic renewal terms
  • Allow consumers to easily cancel the service, including online, effective upon request
  • Avoid using misleading online sales information and payment mechanisms.

Federal and state law requires businesses to provide consumers with clear disclosure of their automatic renewal terms and conditions before charging them for the service. The disclosure must include instruction for the cancelation of the automatic renewal subscription. The law requires businesses to obtain consent from customers prior to automatic renewal and provide confirmation of the transaction. 

San Diego County Superior Court Judge Ronald L. Styn signed the stipulated final judgment between prosecutors and PeopleConnect Inc. on March 1. The company did not admit wrongdoing, but cooperated with prosecutors on the resolution and is taking steps to correct its violations.

The case was among those conducted by the California Automatic Renewal Task Force (CART), formed in 2015 by the Los Angeles County District Attorney’s Office to address rising consumer complaints against online automatic renewal subscriptions. CART members include the District Attorneys of Los Angeles, San Diego, Santa Clara, Santa Cruz and Santa Barbara counties and the Santa Monica City Attorney’s Office.