Meal-Kit Giant Settles Lawsuit Over Automatic Plan Payments Without Proper Consent
HelloFresh has agreed to pay roughly $7.5 million to resolve a lawsuit brought by California prosecutors who accused the meal-kit giant of failing to comply with state rules on subscription renewals.
The settlement, approved in court, ends claims that HelloFresh enrolled customers in automatic renewal plans without clearly disclosing the terms or obtaining proper consent. The agreement requires the company to follow state consumer protection laws and pay restitution, civil penalties, and investigative costs.
The HelloFresh case was filed in the Santa Clara County Superior Court. Under the final judgment, signed by Judge Daniel T. Nishigaya and entered today, HelloFresh was ordered to pay:
• $6.38 million in civil penalties, divided among the prosecuting agencies;
• $120,000 in investigative costs; and
• $1 million in restitution to be distributed to eligible California consumers.
HelloFresh, which occupies approximately 75 percent of the U.S. meal kit delivery market, is headquartered in Germany.
“Consumers who sign up for autorenewal services have a right to know the terms of the plan and decide for themselves if they want to consent to those terms,” Santa Monica City Attorney Doug Sloan said in announcing the deal. He added that his office, along with the California Automatic Renewal Task Force, was committed to protecting consumers across the state.
The lawsuit was filed by CART, a coalition of prosecutors that includes the Santa Monica City Attorney’s Office and the district attorneys of Los Angeles, San Diego, Santa Barbara, Santa Clara, and Santa Cruz counties.
Los Angeles District Attorney Hochman said, “I want to thank the dedicated prosecutors in our Consumer Protection Division and members of the California Automatic Renewal Task Force for their outstanding work on this case, in particular Deputy District Attorney Duke Chau. He and his team worked tirelessly with the Santa Clara County District Attorney’s Office to secure a result that holds a major corporation accountable and delivers restitution to consumers. Their commitment to fairness and justice is what makes this outcome possible.”
HelloFresh, the largest meal-kit service in the U.S., did not admit wrongdoing in the settlement.
