This follows a report in this week’s Courier Mail and in online news articles about a fitness clothing company called Fabletics, co-founded by movie star Kate Hudson.
The Australian Competition and Consumer Commission (ACCC) said concerns were raised about inadequate disclosure of conditions and the ongoing costs of its 'VIP' membership program.
After customers made an initial purchase of discounted active wear clothing on the website they were then charged a monthly $US49.95 subscription for VIP membership.
The ACCC said it had received complaints that some Fabletics customers were unaware they had signed up to monthly subscription payments, and some had difficulty cancelling their memberships.
Another online retailer, Scootprice failed to adequately disclose the fees for its ‘premium’ membership, which ranged from $29.90 per month to $99 per quarter and has since refunded subscription payments following the ACCC investigation.
The ACCC said it has seen a spike in complaints from unhappy consumers regarding the use of the relatively new ‘subscription trap’ model by online retailers.
“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 that the subscription service involves ongoing fees,” said ACCC Chairman Rod Sims.
The ACCC said that Fabletics has agreed to make changes to its website.
A similar trap which has existed for many years involves people downloading special ring tones for their mobile phones then being charged unexpected ongoing monthly charges.
It pays to be very careful whenever paying for anything on the internet, and to read all terms and conditions very carefully (these fees may sometimes be stated on websites but hidden among a long list of terms and conditions and be easily missed).
(This article is based in part on information published online by National Seniors on 23 June 2016)
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