A child's online learning program has agreed to pay $ 10 million to regulate Federal Trade Commission fees for illegal marketing and billing methods.
Los Angeles-based Age of Learning Inc. runs a member-based online learning tool, ABCmouse Early Learning Academy, for children ages 2-8 who provides reading, math and other subjects via their website or mobile app, according to the FTC.
The FTC said the company announced a "special offer" 12-month membership for $ 59.95, but did not tell consumers that the plans would automatically renew indefinitely, leading to additional charges, the FTC said in a statement Wednesday.
Similarly, consumers enrolled in a 30-day free trial membership offered the option to extend their membership after the trial period at a cost of $ 39.95 for 1
The FTC said that the company also did not provide consumers with an easy way to stop the automatic renewals, despite promising "simple cancellation" at the time of notification.
In addition to the $ 10 million ruling, the proposed settlement order. the company from making erroneous statements related to "free", trial, "" trial, "no obligation" or similar plans, when a consumer must take action to avoid future charges.
"ABCmouse did not clearly tell parents that their subscriptions would renew automatically, and then the company made it very difficult for them to cancel," said Andrew Smith, head of the FTC's Bureau of Consumer Protection. "People rely more than ever on distance learning and other online services, and companies need to be aware of automatic renewals and get permission before charging customers. ”
FTC Commissioner Rohit Chopra said in a separate statement, "At a time when many parents are looking for more opportunities for online education enrichment, it is disappointing that services such as ABCmouse have defrauded millions of dollars from families through dark patterns.
He defined dark patterns as functions used to "deceive, control or manipulate users. “To conduct that is profitable for an online service but harmful to users or contrary to their intent.
The company did not respond to a request for comment.