VPN Software Firm Violates California Automatic Renewal Law: Class Action
Virtual private network company Surfshark violates California’s Automatic Renewal Law (ARL) when it fails to present subscription terms “in a clear and conspicuous manner,” a class action (docket 5:24-cv-02299) alleged Wednesday in U.S. District Court for Northern California in San Jose.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Emily Pachoud, a San Jose, California, resident, subscribed to Surfshark’s VPN product in March 2021, said the complaint. Without offering a clear, conspicuous notice of renewal terms, length and cancellation policy, Surfshark enrolled the plaintiff in a continuous service, or automatic renewal service, it said. The defendant renewed Pachoud's subscription without her consent in March 2023 and charged her bank account $71.64, it said.
If Pachoud had known she was enrolled in an automatic renewal service, she wouldn’t have subscribed to Surfshark’s VPN product, the complaint said. As a result, she suffered injury in fact and lost money due to the company’s “misleading, false, unfair, and deceptive practices,” it said.
California’s ARL makes it illegal for companies to charge consumers for automatically renewing subscriptions without meeting “strict disclosure requirements.” These include presenting continuous offer terms in a clear and conspicuous manner and “in visual proximity” to the request for consent of the offer, the complaint said. “Clear and conspicuous” is defined as “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.”
Surfshark doesn't present the requisite auto-renewal terms in a manner compliant with the ARL prior to subscribers' enrolling, the complaint said. It showed a screenshot of Surfshark’s enrollment screens as an illustration. The photo showed a box with small type at the bottom of the payment page that read "Subscription, Automatic Renewal and other Terms" with a drop-down arrow for more information.
The VPN provider fails to obtain affirmative consent from consumers before charging them, doesn’t clearly outline renewal offer terms and fails to clarify that they are enrolling in an automatically recurring subscription, the complaint said. “Instead, Defendant only vaguely states that the offer costs $75.32 for 24 months,” it said.
In addition to ARL violations, Pachoud claims violations of California’s Consumers Legal Remedies and Electronic Funds Transfer acts and its False Advertising and Unfair Competition laws. She seeks injunctive relief prohibiting Surfshark from engaging in the unlawful acts described, plus awards of restitutionary disgorgement of all profits and unjust enrichment; all economic, monetary, actual, consequential, compensatory and treble damages caused by its conduct; punitive damages; attorneys’ fees and legal costs; and pre- and post-judgment interest.