Santa Monica weight loss and supplement company Beachbody has agreed to pay $3.6 million to settle a lawsuit from the city of Santa Monica over automatic credit card renewals, city officials announced Tuesday.
Beachbody, which sells exercise videos and supplements and provides weight loss programs, has also agreed to change its website and alter its sales practices, according to the statement from the office of Santa Monica City Attorney Lane Dilg.
The consumer protection division of the city attorney’s office had filed a lawsuit against Beachbody, alleging the company was charging its customers’ credit cards on an automatic, recurring basis without the required written consent of those customers.
The court judgment, approved by Los Angeles County Superior Court Judge Mitchell Beckloff on Monday, requires Beachbody to pay $3,579,000, $1 million of which will be in the form of restitution to nonprofit groups focusing on community health and nutrition programs. The rest is the penalty payout to the city.
The judgment also requires Beachbody to reform its practices, including getting customers’ consent – through a separate checkbox – for subscription renewals, clearly disclosing the renewal terms, sending reminders of upcoming renewals and allowing customers to cancel their orders.
This is believed to be the first injunction in California to require a separate checkbox for renewals, Dilg said in the statement.
Beachbody’s Chief Legal Officer Jonathan Gelfand said in a statement that the company has always given customers multiple notifications of auto renewal terms.
Related Link: LA 500: Carl Daikeler
“When Santa Monica first reached out to us, we highlighted the multiple times we present customers all of the terms for any auto-renewal products and services,” Gelfand said in the statement. “During our discussions, Santa Monica felt strongly that there should be a new standard set by all e-commerce companies to implement a new checkbox when presenting these terms. Although we disagree with their position that this new standard is legally required, we did see value in collaborating with Santa Monica.”
Public policy and energy reporter Howard Fine can be reached at firstname.lastname@example.org. Follow him on Twitter @howardafine.