Neopets Faces $5M Class Action Over Automatically Renewing Memberships

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The virtual pet website Neopets has been hit with a putative $5 million class action lawsuit over allegations that the company violated California law by automatically renewing customer memberships.

The lead plaintiff known as John Doe filed the Neopets class action lawsuit after discovering that the virtual pet subscription continuously renewed customer accounts yet failed to make it known in a discernible way.

According to the Neopets automatic renewal class action lawsuit, the website company violated the California Business Professions Code which prevents businesses from repeatedly charging customers for a subscription if they fail to disclose the terms in a clear and conspicuous manner before the purchasing agreement is fulfilled.

The Neopets class action lawsuit states that the definition of clear and conspicuous means the automatic renewal information should have been “in 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 symbol ls or other marks, in a manner that clearly calls attention to the language.”

Instead of making it very clear that this was an automatic renewal, Doe claims that at the very bottom of the website page it states (in small print) that “For your convenience, after your current membership period ends, your membership will be automatically renewed using your credit card or PayPal account on file.”

In addition, plaintiff Doe asserts that on the Neopets website, members are encouraged to visit the FAQ in the “help section” if they want to cancel the automatic renewal. The Neopets class action lawsuit states, “Apart from this language in small print, this webpage did not, and does not, contain automatic renewal offer terms or continuous service offer terms as defined by California Business Professions Code.”

The plaintiff alleges that Neopets did not make it clear that a subscription would mean that customers would automatically be charged for an ongoing membership but it also did not provide a easy way for customers to cancel their order before payment.

Neopets is a website that customers can create an account for their own virtual pet and then buy virtual items using virtual currencies. Neopets offers a one-month, four-month, or 12-month subscription for the ability to enjoy the services including games. Customers who purchase a single month are charged $7.95, the four-month plan costs $6.25 per month and the 12-month plan costs $5.83 per month.

If approved, the Neopets class action lawsuit will be open to all Class Members within the United States who purchased any product or service in response to an offer constituting an “Automatic Renewal” from Neopets, Inc., its predecessors, or its affiliates.

The proposed Class is represented by Scott J. Ferrell, Richard H. Hikida, David W. Reid, and Victoria C. Knowles of the Newport Trial Group.

The Neopets Automatic Renewal Class Action Lawsuit is John Doe v. Neopets Inc. Case No. 2:15-cv-08395 in the U.S. District Court for the Central District of California.