Salesforce Class Action Says Automatic Renewal Violates California Law

A Salesforce customer says the company’s automatic payment plan fails to comply with several provisions of California’s consumer protection law.

Plaintiff Kathy Lira accuses defendant Salesforce.com Inc. of taking automatically-recurring electronic payments from its customers without providing them the terms and notice required by California law for that type of payment arrangement.

According to this Salesforce class action lawsuit, the company markets customer support services and related products through its desk.com website.

Salesforce’s “Standard” service comes at a cost of $20 per month. Customers can pay for desk.com service though automatic debits from their bank or credit card account.

Lira says subscriptions like these that automatically debit a subscriber’s bank or credit card are governed by a California consumer protection law passed in 2010.

Under this law, businesses that offer these “automatic renewal” payment plans are required to disclose the plan’s automatic renewal terms in clear and conspicuous language, then get the customer’s affirmative consent to the plan in temporal or visual proximity to the offered terms.

The customer is also entitled to an acknowledgement from the business that contains the automatic renewal terms, the relevant cancellation policy, and information on how the customer can cancel the subscription.

Lira says the Salesforce “Master Subscription Agreement” fails to clearly and conspicuously lay out the terms relevant to recurring automatic payments, or the ways in which customers may cancel their subscriptions.

She says this agreement fails to clarify that, following a free trial period, the Salesforce subscription will continue and the customer will start to be charged, until the customer affirmatively cancels the subscription. The agreement allegedly does not explain that the customer will be charged on a recurring basis, or how the customer can cancel their subscription.

Lira also takes issue with the online form used to finalize a Salesforce subscription purchase. This form offers no description of Salesforce’s “automatic renewal” policy, she says. Her Salesforce class action lawsuit includes an image of this form, showing fields for customer information, a checkbox the customer can use to agree to the desk.com terms and conditions, and an offer for a plan upgrade.

Once the customer agrees to a desk.com subscription, Salesforce allegedly fails to provide customers with the requisite acknowledgement of the automatic renewal terms and cancellation information, Lira claims.

Lira seeks to represent a plaintiff Class that would cover all persons in California who, within the applicable statutory limitations period, purchased any product from Salesforce or its affiliates under terms that constitute “automatic renewal” under California law. She expects Class Members will number in the tens of thousands.

She is asking the court for a declaration that Salesforce’s automatic renewal terms violate applicable California consumer protection laws. She also seeks an award of damages, restitution, and reimbursement of court costs and attorneys’ fees.

Lira is represented by attorney Scott J. Ferrell of Pacific Trial Attorneys.

The Salesforce Automatic Renewal Class Action Lawsuit is Kathy Lira v. Salesforce.com Inc., Case No. BC651386, in the Superior Court for Los Angeles County.