The dating website eHarmony recently settled with California municipalities in the amount of $1.2 million in penalties and $1 million in restitution to consumers in connection with claims that eHarmony’s auto-renewal engaged in false advertising and violated California’s law on automatic purchase renewals. Five municipalities (Santa Monica City, Santa Cruz, Santa Clara, Napa, and Shasta Counties) alleged the eHarmony failed to explain its subscription fee policy to consumers prior to sign up and did not provide consumers with a copy of a services agreement that explained the automatic payment process. The settlement order requires eHarmony to (i) disclose any auto renewal terms in a clear and conspicuous manner, (ii) abstain from charging California consumer’s credit cards for an auto renewal service without first obtaining affirmative consent to do so, and (iii) provide a cancellation mechanism.

TIP: Advertisers should be aware that auto-renewal subscriptions and negative option marketing practices are subject to federal and state laws which require, among other things, clear and conspicuous disclosure of material terms such as the recurring nature of payments and in some cases, informed, affirmative consent.