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ARTICLE · 01 MARCH 2022

Noom Settlement Showcases Potential Pitfalls On Auto Renewals

Winston Taylor
Explore more from Winston Taylor

Automatic renewals are becoming increasingly popular, but an overly complicated cancellation process poses substantial risk of both class action lawsuit and regulatory enforcement actions.

United StatesConsumer Protection
Nicholas P. Matosian
Nicholas P. Matosian
Amanda L. Groves
Amanda L. Groves

Key Takeaway

Automatic renewals are becoming increasingly popular, but an overly complicated cancellation process poses substantial risk of both class action lawsuit and regulatory enforcement actions.

Last week the popular diet app Noom announced that it had reached a $62 million settlement with plaintiffs in a class action who brought a host of state-law consumer protection and common law claims based on Noom's allegedly deceptive enrollment scheme.  

The lawsuit, which was originally filed in May 2020, but was amended a third time in January 2021, argued that Noom's substantial recent growth in revenue came not from satisfied dieters, but from misled consumers who were automatically charged fees. More specifically, plaintiffs alleged that Noom advertised a free trial period so long as the user cancelled during the period.  But in reality, Noom intentionally created a difficult cancellation process, so users who were unable to withdraw in time were instantly

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