HelloFresh, the world’s largest meal kit delivery company, has been ordered to pay $7.5 million in penalties for making subscriptions difficult to cancel.
A lawsuit filed in Santa Clara County alleged HelloFresh misled Californians into enrolling in auto-renewing subscriptions and failed to offer an easy way to cancel them.
“No company, no matter how big or well-known, is exempt from California’s consumer protection laws,” Los Angeles County District Attorney Nathan Hochman said in a statement Monday.
“We will aggressively pursue enforcement when businesses take advantage of consumers by failing to clearly disclose subscription terms, obtain proper consent, or provide a fair way to cancel. Consumers have a right to know what they’re signing up for, and they deserve better,” he continued.
While most of the settlement will be divided among prosecuting agencies, $1 million will be distributed to “eligible California consumers,” according to a press release from the D.A.’s office.
A HelloFresh spokesperson denied any wrongdoing in a statement to The Independent: ”We take our commitment to customer transparency very seriously, and our subscription model and cancellation policies have been consistently clear to customers throughout the whole customer journey.”
“While we deny any wrongdoing, we have cooperated fully with the coalition of California District Attorneys and have entered into a settlement agreement with them to resolve the matter amicably,” the spokesperson said.
HelloFresh, based in Germany, makes up 75 percent of the U.S. meal kit delivery market. Consumers can personalize the kinds of recipes they want with options including “Family Friendly” and “Under 20 Minutes.”
Based on their preferences, how many people they need to feed, and how many recipes they want per week, HelloFresh sets customers up with a plan and delivers the ingredients and recipes needed to make the meals.
The lawsuit claimed HelloFresh failed to “clearly and conspicuously” share its subscription terms before collecting payment, obtain customers’ “affirmative consent” before charging their cards, provide an acknowledgement with its subscription terms after payment and offer an “easy-to-use mechanism” for canceling subscriptions, the D.A.’s press release said.
