By Jonathan Stempel
(Reuters) – Adore Me, an online lingerie retailer recently purchased by Victoria’s Secret, agreed to pay $2.35 million and offer refunds to settle charges by 31 U.S. states and Washington, D.C., that it deceptively marketed its VIP Membership program to consumers.
The states said Adore Me made enrollment the default selection when consumers made purchases, without properly disclosing they would be charged $39.95 a month unless they made additional purchases or decided to “skip” the charge before the sixth day of the month.
Adore Me was also accused of making it “extremely difficult” to cancel memberships, forcing consumers to forfeit store credits when they canceled, and using a fake “countdown clock” to mislead consumers into believing that discounts would expire when the clock struck zero.
“No one should be surprised by a recurring charge or forced to jump through endless hoops to cancel a subscription, yet this is precisely how Adore Me’s business model operated,” Washington, D.C., Attorney General Brian Schwalb said.
The settlement negotiated by Washington, D.C., Pennsylvania and Texas requires Adore Me to offer refunds of unused credits to people with active VIP memberships, make enrollment “opt-in” instead of “opt-out,” and improve disclosures.
Based in New York, Adore Me denied wrongdoing in agreeing to settle. Its alleged wrongdoing occurred from 2012 to at least 2016.
“Adore Me strongly values our customer relationships and takes our responsibilities to our customers and subscription management practices very seriously,” the company said in a statement.
Victoria’s Secret, based in Reynoldsburg, Ohio, bought Adore Me at the end of December for $391 million in cash, plus additional payments depending on Adore Me’s performance.
(Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis)