Adore Me, the lingerie startup acquired by Victoria’s Secret & Co., will refund District subscribers for improperly charged subscription fees, Attorney General Brian Schwalb announced Friday.
An estimated 2,500 consumers in D.C., as of 2021, who have VIP Memberships and store credits from recurring charges will be eligible for a refund. Patrons who filed a complaint with the attorney general’s office who don’t have active membership will also be provided full refunds.
“Under DC law, consumers are entitled to timely, accurate, and complete information about every purchase they make. No one should be surprised by a recurring charge or forced to jump through endless hoops to cancel a subscription, yet this is precisely how Adore Me’s business model operated,” Schwalb said in a news release.
Attorneys general from 32 jurisdictions joined the settlement, which alleged Adore Me broke several consumer protection laws by not disclosing terms in its VIP Membership program, making it difficult to cancel subscriptions, forcing subscribers who cancel to give up their store credits and manipulating consumers into making purchases with a fake countdown clock on their website.
The settlement requires Adore Me to reform its business practices and pay $2.35 million to all jurisdictions. D.C. will receive $151,798.65 of that amount.
“This investigation and settlement with Adore Me should send a clear message: any company that seeks to profit by tricking or manipulating DC residents will be held accountable,” Schwalb said.
A spokesperson for Adore Me responded to a request for comment to Reuters after the settlement was negotiated by the District, Pennsylvania and Texas.
“Adore Me strongly values our customer relationships and takes our responsibilities to our customers and subscription management practices very seriously,” the company told Reuters.
Future users will see serious changes to the business, if the terms of the settlement are met. In the future, the company will be required to:
- Clearly disclose all terms of membership programs, including fees and costs, before joining;
- Disclose how much and how often subscribers will pay for recurring charges;
- Shift from opt-in to an opt-out system for subscribing;
- Get informed consent from users who enroll in the service; and
- Ensure a simple, easily accessible way to cancel memberships and give refunds to users.
Adore Me was also ordered to stop charging subscribers if they have accumulated 12 months of store credits through the company’s recurring charges.
On May 31, Victoria’s Secret CEO Martin Walters commented on how the business faired through the first quarter of 2023.
“Our international business continued its stellar growth around the globe with China as a particular bright spot, and our recent acquisition, Adore Me, met our expectations during its first quarter as a part of Victoria’s Secret & Co,” Walters said.
When the digital retailer was purchased in January, the company executive called the acquisition of Adore Me a “win-win” chance to continue working with the business, identifying the digital service as the world’s leading retailer of intimate apparel.
“From the beginning, we evaluated Adore Me as a two for one opportunity – a technology-led, digital-first innovator in the intimates category and a highly efficient, growing and profitable standalone business model,” Walters said. “I am thrilled with the swift completion of the acquisition and excited to welcome the entire Adore Me team into the VS&Co family”
D.C.’s settlement with Adore Me was the second for the company and first completed since it’s acquisition by Victoria’s Secret & Co. in 2023.
The first settlement for $1.3 million was completed by the Federal Trade Commission in 2017.
In that case, the FTC alleged that users from May 2015-May 2016 Adore Me took unused credits from consumers who cancelled membership or initiated chargeback to dispute purchases. It required Adore Me to stop misrepresenting its sales using a negative-option and provide a simple way for subscribers to immediately stop recurring charges.
