Philo TV Subscription Auto Renewal Investigation

The Lyon Firm is investigating potentially illegal automatic renewal schemes and deceptive billing practices on behalf of plaintiffs nationwide. If you have questions about an auto-renewal of your Philo TV subscription, contact The Lyon Firm to review.

Deceptive billing schemes have become a frequent complaint for consumers across the country. Many modern business models rely on auto renewal contracts and companies feed on this continual cash flow. These companies are quick to charge you for a service, but they may be overlooking consumer protection laws that make them liable for deceptive billing violations.

Philo TV offers live TV, unlimited DVR, on-demand, and content from programmers on web browsers, iOS, Apple TV, Android devices, FireTV, and Roku. Philo is based in San Francisco. If you have encountered subscription issues, contact us for a free consultation.

Online automatic renewal programs are regulated by the Federal Trade Commission (FTC) under the Restore Online Shoppers’ Confidence Act (ROSCA), which requires clear disclosures of contract terms, informed consent before a purchase, and an easy method to cancel the charges. Violations of this law are regarded as unfair or deceptive acts or practices under the Federal Trade Commission Act.

Joe Lyon is a class action consumer fraud lawyer investigating Philo TV subscription auto-renewal claims, and other deceptive billing practice complaints for plaintiffs nationwide.

What Are the Requirements for Proper Auto-Renewal?

To be clear, companies like the Philo TV can legally automatically renew subscriptions if they make all terms clear and obtain your written consent. Too often, however, companies rely on customer confusion, deliberately bypass these requirements and violate consumer fraud statutes.

There are specific components that must be included in subscription automatic renewal contracts:

• Clear disclosures about the offer: Companies must present the terms of any automatic renewal offer “clearly and conspicuously.”
• Disclosures about the contract period: The contract period must be clearly presented prior to a consumer purchase.
• Obtaining consent: Consent must be “express” and “informed.” Written consent is voluntarily given by a competent individual after details of the offer have been disclosed.
• Written confirmation following a purchase: Written acknowledgment must be given to the customer after a purchase, and must include the initial disclosures, and specific information on how to cancel. If a free trial is offered, this must also include details on how to cancel the subscription before being charged.
• Cancellation mechanisms must be simple: Methods to cancel a subscription must be cost-effective, timely, and easy.
• Renewal reminders must be timely: These vary by state, but companies should send proper notice to customers before their subscription is automatically renewed.

Philo TV Subscriptions: What are Automatic Renewal Law Violations?

There have been allegations that Philo TV may not entirely comply with California Automatic Renewal Laws, and may be liable for relevant violations. California law requires the following:

1) “clear and conspicuous” disclosure, before an agreement is fulfilled, of “automatic renewal offer terms” or “continuous service offer terms”; (2) “affirmative consent” to “the agreement containing” those terms; (3) a retainable acknowledgment of those terms and any cancellation policy; and (4) a retainable notice of any “material changes” to those terms.

California’s ARL requires that “automatic renewal offer terms” and “continuous service offer terms” be disclosed in a “clear and conspicuous manner.” Id. § 17602(a)(1). “Automatic renewal” is defined as “a paid subscription or purchasing agreement [that] is automatically renewed at the end of a definite term for a subsequent term,” and “continuous service” is defined as “a subscription or purchasing agreement [that] continues until the consumer cancels the service.” Id. §§ 17601(a), (e). The “terms” of an “automatic renewal offer”—i.e., the terms that must be disclosed in a “clear and conspicuous manner”—are defined as follows:

1. That the subscription or purchasing agreement will continue until the consumer cancels.
2. The description of the cancellation policy that applies to the offer.
3. The recurring charges that will be charged to the consumer’s credit or debit card or payment account with a third party as part of the automatic renewal plan or arrangement, and that the amount of the charge may change, if that is the case, and the amount to which the charge will change, if known
4. The length of the automatic renewal term or that the service is continuous, unless the length of the term is chosen by the consumer.
5. The minimum purchase obligation, if any.

Id. §§ 17601(b)(1)–(5).

When Must Those Terms Be Disclosed?

The terms must be disclosed “before the subscription or purchasing agreement is fulfilled and in visual proximity, or in the case of an offer conveyed by voice, in temporal proximity, to the request for consent to the offer.” Id. § 17602(a)(1).

How Must Those Terms Be Disclosed?

Whether terms are disclosed in writing or orally, the disclosure must be “clear and conspicuous.” Id. § 17601(b). In the case of written disclosures, “clear and conspicuous” means “in larger type than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same size, or set off from the surrounding text of the same size by symbols or other marks, in a manner that clearly calls attention to the language.” Id. § 17601(c). And in the case of audio disclosures, “clear and conspicuous” means “in a volume and cadence sufficient to be readily audible and understandable.” Id.

What Kind of Consent Must Be Obtained?

California requires that consumers give “affirmative consent” to “the agreement containing” the automatic renewal or continuous service terms. As of July 1, 2018, that requirement was amended to make clear that it extends to “terms of an automatic renewal offer or continuous service offer that is made at a promotional or discounted price for a limited period of time.” Id. § 17602(a)(2). It should be noted that some states’ ARLs require disclosure but do not require an affirmative act of consent.

What Qualifies as “Affirmative Consent”?

Although California’s ARL does not define “affirmative consent,” the legislative history and recent enforcement actions are instructive. As can be seen in the California Senate’s Bill Analysis, two avenues for securing affirmative consent for purposes of California’s ARL were contemplated:

[I]n any automatic renewal offer made on an Internet Web page, the business [must] clearly and conspicuously disclose the automatic renewal offer terms prior to the button or icon on which the customer must click to submit the order. In any automatic renewal offer made on an Internet Web page where the automatic renewal terms do not appear immediately above the submit button, the customer must be required to affirmatively consent to the automatic renewal offer terms.

Can I File a Lawsuit for Deceptive Billing Practices?

Magazine subscribers who have been unwittingly entered into an automatic renewal agreement should contact a consumer fraud attorney and consider taking legal action. The Lyon Firm believes that companies that mislead their customers into agreements should be held liable and compensate customers for any violations.

You may ask yourself the following questions before contacting an attorney:

• Are your Philo TV subscription terms and conditions clear and conspicuous?
• Did Philo TV clearly explain their automatic renewal program?
• Does the company have clear instructions on how to cancel a subscription?
• Did Philo obtain your affirmative consent before charging you for the product or service?
• Did the company give you proper notice (30-60 days) before your subscription contract was renewed?

Multiple states have updated consumer protection laws that prohibit companies from automatically renewing subscriptions without obtaining proper consent or clearly explaining the terms and conditions of the contract. Federal laws also protect consumers. According to the Federal Trade Commission (FTC), businesses must take proper steps to ensure that charges to customers’ credit cards and accounts are authorized.

Any violations of the Consumer Fraud and Deceptive Practices Act by the Philo TV or another subscription-based entity may constitute an unlawful practice and affected individuals can contact an attorney to consider seeking compensation and justice.