A multi-million-dollar settlement has been reached with CCH Incorporated, a law book publisher, over allegations of automatic subscription renewals, Attorney General Pam Bondi announced Tuesday. The company was accused of the practice known as a “negative option plan,” which does not provide adequate disclosures to consumers.
As a result of the settlement, CCH will mail approximately 5,000 consumers refund notices and provide a total refund amount up to $5 million to the consumers. The Attorney General’s Office reports it will receive $1.4 million for investigative costs, attorney fees and future enforcement efforts.
“Consumers who receive products or services that they do not recall ever ordering or subscribing to should call 1-866-9-NO-SCAM,” Bondi said.
Bondi’s office released the following information regarding the settlement:
CCH Incorporated, through the brands Wolters Kluwer, Aspen Publishers, Loislaw.com, and Kluwer International, allegedly used negative option plans in the sales of their products. According to the Attorney General’s Office investigation, CCH marketed its print products through trial offers and then placed customers in automatic shipment and automatic subscription renewal plans without clear and conspicuous disclosures of renewal terms.
Eligible Florida consumers paid for a first update, supplement or new edition in an automatic shipment plan or paid for a first automatic renewal of publication between Feb. 13, 2009 and Feb. 13, 2013. Consumers who request a refund and return the last update received will be issued a refund for all updates, supplements, new editions or automatic renewals, as well as any shipping or handling charges paid by the consumers.
As part of the settlement, CCH will also modify its business practices to ensure that automatic shipment plans and automatic renewal of subscriptions are entered into only after all appropriate disclosures have been provided to customers and the customers have provided affirmative consent to the terms.
Consumers should be aware that negative option arrangements, in order to be lawful and comply with 39 U.S.C. §3009, must meet the following two requirements:
- The seller must clearly and conspicuously disclose the terms of the negative option to the consumer, and
- The consumer must agree from to the negative option terms and to participate in the plan from the beginning.