SANTA BARBARA Cloud storage service Box, Inc. has settled a consumer protection lawsuit for $274,000.
On Feb. 14, Santa Barbara County Superior Court Judge Colleen Sterne ordered Box to pay penalties, court costs, and restitution in the civil law enforcement case. The company did not admit liability as part of the settlement, according to the Santa Barbara County District Attorney’s Office.
The prosecuting team included the Santa Barbara and Santa Monica District Attorney’s offices, as well as the District Attorney’s Offices of Los Angeles, San Diego, Santa Clara, and Santa Cruz counties.
Prosecutors determined Box was charging California customers for automatic renewals on their accounts without disclosing the key terms of the renewals or getting express prior consent.
The lawsuit claimed this conduct violated the California Automatic Renewal Law, False Advertising Law, Unfair Competition Law, and the federal Restore Online Shoppers Confidence Act.
Under the terms of the judgment, Box must now disclose the renewal terms clearly, get customer consent through a separate check-box that does not include other terms and conditions, send a clear summary of the renewal terms after consumers pay and allow consumers to cancel readily.
Box must pay $216,000 in civil penalties, $24,000 for the costs of the investigation and $34,000 in restitution to the Consumer Protection Prosecution Trust Fund.
“Companies with automatically renewing subscription services are a large part of our economy, and unclear or hidden terms are harmful to consumers and against the law. Consumers are entitled to make informed choices about how to spend their money,” District Attorney Joyce Dudley said in a statement.
— Paul Gonzalez
