A disgruntled consumer who filed suit against Webloyalty.com based on allegations of being misled into enrolling in the company’s savings club recently had his case dismissed by a California federal court.

 

In a purported class action entitled Berry v. Webloyalty.com, the Plaintiff sued Webloyalty.com and Movietickets.com after accepting an offer to save $10 off his next purchase if he provided his e-mail address, and found himself enrolled in Webloyalty’s membership program, at a cost of $12.00 per month.  His suit was premised on the grounds that Webloyalty misrepresented the fact that he could receive a coupon and not enroll in a savings club.

In its decision, the Court made reference to the fact that the Defendants made “explicit and repeated disclosures” on the registration page of their website which Plaintiff failed or refused to read, a common oversight that proved to be his downfall.   The Plaintiff  “did not spend substantial time to read the text or other information provided in the pop-up window before he provided his e-mail address and clicked the green button.”

Three Affirmative Steps

After the disclosures were presented to him, the Plaintiff was required to take three affirmative steps to accept the terms of the club membership – he entered his e-mail twice and clicked the ‘YES’ button.  Right below the yes button, he could have clicked ‘No thanks’ to refuse membership.  The Court remarked that “such disclosures are sufficient to place the consumer on notice of the conditions and terms of the club.”

In addition to a disclosure immediately above the e-mail entry boxes, the enrollment page had five other disclosures that informed the consumer that by choosing to join the club, he or she will be charged $12 per month after an initial free 30-day trial, the court said. It also included three different statements that if the consumer chose to enroll in the club, the consumer’s credit or debit card information would be transferred from MovieTickets.com to Webloyalty and used to charge the monthly membership fee.

“By entering my e-mail address as my electronic signature and clicking YES, I have read and agree to the Offer and Billing Details and authorize MovieTickets.com to securely transfer my name, address, and credit or debit card information to Shopper Discounts & Rewards for billing and benefit processing.”

It is truly refreshing that a Court finally places at least some responsibility on the consumer to read and understand the terms of an offer.  However, things would have turned out much differently had Webloyalty’s disclosures been less obvious.  The court’s decision hinged on the “in your face” nature of the disclosures, steps that too few club programs undertake.

 

 

Seth Heyman
Seth D. Heyman is a California attorney with extensive experience in advertising and marketing law, corporate law, contracts, governmental regulations, international business, and Internet law. He has counseled numerous successful companies, both public and private, and was responsible for regulatory compliance, contract management, corporate governance, and HR best practices for multiple organizations in many diverse industries, including marketing, telecommunications, energy, and technology development. He offers insight and guidance on federal and state direct mail, TV, radio, telemarketing, and Internet marketing laws, as well as online promotions, Internet privacy, data protection regulations, and similar matters.

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