United States of America: Announced CFPB public lawsuit against Active Network alleging it employed illegal registration practices and dark patterns

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Description

Announced CFPB public lawsuit against Active Network alleging it employed illegal registration practices and dark patterns

On 18 October 2022, the United States Consumer Financial Protection Bureau (CFPB) sued the online event registration company Active Network for violating the Consumer Financial Protection Act of 2010 (CFPA), the Electronic Fund Transfer Act (EFTA) and Regulation E. The company was sued for manipulating consumers into subscriptions through dark patterns and a negative option renewal policy. Through alleged illegal practices, such as deceiving people trying to register for fundraising road races and other events, the company pushed customers to sign up for Active discount club memberships, generating, as of 2011, more than USD 300 million from about three million users. According to the lawsuit, approximately 72% of consumers enrolled in Active Advantage through the offer shown and who requested cancellation of their membership in 2019 were 'unaware' of their enrolment. Furthermore, ACTIVE allegedly also failed to comply with the Electronic Fund Transfer Act (EFTA) since it increased the annual membership fee without notifying consumers at least 10 days before the charging happened. The CFPB is requesting the Court to prohibit the company from committing further violations of the FCA and for compensation for the damages suffered by consumers, including termination or reformation of contracts, repayment of sums paid, restitution and compensation for unjust enrichment. In addition, the CFPB asks the Court to impose a civil penalty on the company.

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Scope

Policy Area
Other operating condition
Policy Instrument
Consumer protection regulation
Regulated Economic Activity
digital payment provider (incl. cryptocurrencies)
Implementation Level
national
Government Branch
judiciary
Government Body
court

Complete timeline of this policy change

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2022-10-18
under deliberation

On 18 October 2022, the United States Consumer Financial Protection Bureau (CFPB) sued the online e…