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ACCC warns on subscription-based retailers after complaints

Wednesday, 22 Jun 2016 11:19:40 | Thuy Ong

The Fabletics website

Sporting goods retailer Fabletics, co-founded by Hollywood actress Kate Hudson, will change its website to better disclose its subscription-based model after the competition watchdog raised concerns over its "VIP" membership program.

Fabletics charges a monthly subscription fee of $US49.95 for VIP membership, which entitles customers to purchase discounted active wear each month using credit gained through the monthly payments.

The Australian Competition and Consumer Commission received complaints customers were unaware they signed up to the subscription payments and had difficulty cancelling memberships.

"We are putting online retailers on notice that they must clearly and prominently display any ongoing membership fees and we are warning consumers to look out for them when shopping online," ACCC chairman Rod Sims said in a statement.

"The ACCC has seen a spike in complaints from unhappy consumers regarding the use of the relatively new 'subscription trap' model by online retailers," Mr Sims said.

"This involves online retailers treating a consumer's decision to make a single purchase as consent to signing them up to a paid, ongoing subscription service without adequately disclosing."

Scootprice also working with ACCC for better disclosure

Scootprice, a Singapore-based online store which sells clothes, appliances and electronics, has also been singled out following customer complaints for failing to adequately disclose fees for its "Premium" membership, which ranged from $29.90 per month to $99 per quarter, offering exclusive sales and free shipping.

The ACCC said it received complaints some Scootprice customers were unaware they had signed up for a subscription, but has since refunded customers.

"Some businesses disclose the ongoing payments, however it can be buried at the bottom of long webpages, a number of clicks away, or in fine print or confusing terminology," the ACCC said.

"By the time some consumers realise that ongoing payments are involved, hundreds of dollars may be lost."

The ACCC flagged Fabletics and Scootprice are cooperating with the watchdog to make membership fees clearer on their websites and throughout the checkout process.

Both companies have been approached for comment.

AustraliaPlus


 

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