Online clothing retailer will pay refunds to dozens of Washingtonians to resolve deceptive advertising and billing claims

Dozens of Washington consumers will receive refunds, with the average totaling about $2,500, from an online clothing retailer as part of a settlement resolving claims the company deceptively steered shoppers into recurring monthly payments that were difficult to cancel.

Under the agreement with the Washington Attorney General's Office (AGO) and 32 other attorneys general, TFG Holding, Inc., which operates the brands JustFab, ShoeDazzle, and FabKids, will provide refunds to consumers across the country and pay $1 million to be divided among the participating states. In Washington, 42 consumers will receive refunds averaging $2,485, and the company will pay $15,000 to the state to be used for consumer protection and other purposes.

"Many of us have faced the aggravation of getting lost in some online labyrinth to try to cancel a recurring payment. It's even worse if you never meant to sign up for the payment in the first place," Attorney General Nick Brown said. "I'm grateful to our team for reaching this settlement and for fighting every day to protect Washington consumers from deceptive practices."

In an increasingly digital world, consumers are vulnerable to hidden fees or charges when shopping online. In a survey conducted in 2022 by the AGO of more than 1,200 Washington consumers, 59% said they had unintentionally enrolled in a recurring payment plan when they thought they were making a one-time purchase.

TFG Holding offers consumers discounted pricing if they enroll in the company's VIP Membership Program. Once enrolled in the program, consumers are charged $49.95 a month, unless before the sixth day of each month, consumers make a purchase from the company or log into their membership accounts to "skip" the charge. The monthly charges accrue in the consumers' accounts in the form of store credits, which can be used on future purchases.

The settlement alleges that TFG Holding violated state consumer protection laws in multiple ways, including by:

• Misrepresenting the price consumers could expect to pay for products advertised on the company's websites,
• Automatically enrolling consumers without their consent into a membership program that included a recurring charge, and
• Implementing and maintaining cancellation policies that frustrated consumers' ability to cancel the membership programs into which they were enrolled.

Under the settlement, the company must clearly disclose the terms of its VIP Membership Program, obtain the consumer's express informed consent prior to enrolling someone in the VIP Membership Program, provide a simple way to cancel recurring payments, and promptly honor cancellation requests.

The company will also be required to:

• Provide automatic restitution to all consumers who enrolled in a VIP Membership Program prior to May 31, 2016, and only made an initial purchase but no subsequent purchases and never skipped a payment; and
• Pay restitution to consumers who have an existing eligible complaint against the company that has not been resolved, and to consumers who file a new eligible written complaint with the company or the Attorney General's Office within 90 days of the effective date of the settlement that was not previously resolved.

If you think you may be entitled to restitution from TFG Holding, please submit a complaint with our office. Consumers can also file a complaint directly with the company by emailing [email protected].

A copy of the settlement is available here.

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Washington's Attorney General serves the people and the state of Washington. As the state's largest law firm, the Attorney General's Office provides legal representation to every state agency, board, and commission in Washington. Additionally, the Office serves the people directly by enforcing consumer protection, civil rights, and environmental protection laws. The Office also prosecutes elder abuse, Medicaid fraud, and handles sexually violent predator cases in 38 of Washington's 39 counties. Visit https://www.atg.wa.gov to learn more.

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