Exposed: Online Lingerie Retailer Pays Millions To Settle Deceptive Marketing Claims
Pennsylvania attorney General Michelle Henry has announced a $2.35 million multi-state settlement with online intimate apparel retailer Adore Me, Inc.
The settlement comes in response to claims that the company deceptively marketed its VIP Membership Program and made it challenging for consumers to cancel their memberships. Adore Me offers discounted pricing to consumers who enroll in the VIP Membership Program, which charges $39.95 per month unless customers make a purchase or choose to “skip” the charge before the fifth day of each month. The charges accumulate as store credits that can be used for future purchases.
According to the settlement, Adore Me engaged in several violations of Pennsylvania’s consumer protection laws. The company failed to disclose the terms and amount of the monthly charge to consumers properly. They also misrepresented that their discounted prices were time-limited, making it difficult for consumers to cancel their memberships from January 2012 to January 2016. Moreover, Adore Me improperly eliminated consumers’ VIP Membership store credits upon cancellation during the same period.
Henry expressed concern over Adore Me’s misleading practices, emphasizing that companies must provide clear notice and reasonable means for customers to cancel recurring subscription charges.
“It is illegal for companies to subject customers to recurring subscription charges without giving clear notice and a reasonable way to cancel. Companies who advertise online should take this settlement as a warning: if you break the law, my office will find out and do whatever we can to get Pennsylvanians their money back,” the AG said.
As part of the Assurance of Voluntary Compliance settlement, Adore Me is obligated to inform all consumers with active VIP Memberships about their ability to obtain refunds for any unused store credits. The company has also agreed to implement changes to its business practices, including discontinuing the prior misconduct outlined in the settlement.
Adore Me, recently acquired by Victoria’s Secret, has denied any wrongdoing despite agreeing to the settlement. The alleged misconduct occurred from 2012 to at least 2016. The settlement, negotiated by Washington, D.C., Pennsylvania, and Texas, mandates that Adore Me offer refunds for unused credits, make enrollment an opt-in process, and improve disclosure practices.
The $2.35 million settlement amount will be paid to the involved states and contribute to further consumer protection investigations.
Victoria’s Secret acquired Adore Me in late December for $391 million in cash, with potential additional payments depending on Adore Me’s performance.
Information for this story was found via Pennsylvania Attorney General’s Office, Reuters, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.