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ACCC Warns Online Retailers Over Scam ‘Subscription Traps’

ACCC Warns Online Retailers Over Scam ‘Subscription Traps’

The Australian Competition and Consumer Commission has rapped the knuckles of a number of online retailers who charge customers not only for an initial purchase but also for ongoing “membership services” – which the customers may not have been aware they had “joined”.

In a new report it instances the case of Fabletics, a US-based exercise clothing retailer. Australian customers who purchased an item from Fabletics found themselves being charged a monthly US$49.95 fee for “VIP membership” – with many unaware they had signed up for this, and others experiencing difficulty cancelling their memberships.

Fabletics has since cooperated with the ACCC to change its Web site, ACCC says. But the commission notes similar cases of “subscription trap” complaints about another online retailer, Scootprice, which it has says failed to adequately disclose fees for its “Premium” membership.

“We are putting online retailers on notice that they must clearly and prominently display any ongoing membership fees and we are warning consumers to look out for them when shopping online,” said ACCC chairman Rod Sims.

He added: “ACCC will not hesitate to take appropriate enforcement action against online retailers who attempt to utilise subscription traps in the future.”

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