SimpliSafe's Auto-Renew Subscriptions Rooted in 'Consumer Confusion': Suit

SimpliSafe relies on “consumer confusion” in the illegal automatic renewal scheme used for its security system’s subscription monitoring service, alleged a Wednesday class action (docket 2:23-cv-433) in U.S. District Court for Eastern California in Sacramento.

When consumers sign up for SimpliSafe subscriptions, the company enrolls them in a program that automatically renews the subscriptions month to month, resulting in monthly charges on the customer’s credit card or other payment method. In doing so, SimpliSafe “fails to provide the requisite disclosures and authorizations required to be made to California consumers” under the state’s Automatic Renewal Law (ARL), said the complaint.

Auburn, California, plaintiff Gregory Krikorian bought a SimpliSafe subscription in March 2022, but the company didn’t provide the requisite automatic renewal offer terms of the subscription program, he said. Though the checkout page provided some relevant information on automatic renewal, the manner in which it was presented “was insufficient” to put Krikorian “on notice” of the material auto-renewal terms, it said.

SimpliSafe automatically renewed Krikorian monthly for the $27.99 interactive monitoring plan from March-November, 2022, without his knowing consent. His “confusion and surprise” at the billing practices were the direct result of SimpliSafe’s failure to put him on notice of the recurring charges as part of the subscription, the complaint said. Because the company didn’t disclose the recurring charge information as required by the statute, Krikorian was unable at the point of sale to accept SimpliSafe’s offer “or knowingly enter into” the purchase agreement.

Krikorian attempted to cancel his SimpliSafe subscription in November but found “no useful guidance in the vague and incomplete terms that were presented to him” on the checkout page or acknowledgment email. “Mr. Krikorian struggled immensely with the cancellation process,” the complaint said. He couldn’t find an unsubscribe option for his subscription and resorted to calling the company to cancel, a “difficult and time-consuming” process. He wasn’t able to cancel until Nov. 1, after he had been charged $195.93 “without his knowing or affirmative consent.”

Consumers can sign up for one of three SimpliSafe subscription plans, which range $9.99-$27.99 per month, via the company website or app. To do so, they provide their billing information, and then the company automatically charges their payment method monthly. SimpliSafe is then able to “unilaterally charge its customers renewal fees without their consent” since it has their payment information, the complaint noted. “Defendant has made the deliberate decision” to charge customers on a monthly or yearly basis, “absent their consent under the ARL, relying on consumer confusion and inertia to retain customers, combat consumer churn and bolster its revenues.”

The relevant screens and buttons presented to Krikorian didn’t “clearly and conspicuously state that his SimpliSafe Subscription would automatically renew every month until he cancelled” or that recurring fees would be charged to his payment method as part of the plan. He wasn’t told the timing of the charge would change or he would receive the full cancellation policy that applied to the purchase, the complaint said.

SimpliSafe displays a comparison chart of the three subscription options in a support article on the website, but the monthly fees for the standard and interactive monitoring plans cost an additional $2 when added to the customer’s virtual shopping cart, so that the plans are advertised at $17.99 and $27.99 plans but appear as $19.99 and $29.99 monthly at checkout, the complaint said. The company doesn't market the monthly rates of its subscriptions, instead opting to show the nominal daily rates consumers are subjected to “but will not be reflected in Defendant’s charges” to their payment methods, it said.

Under the ARL, online retailers who offer automatically renewing subscriptions to California consumers must provide the complete automatic renewal offer terms in a “clear and conspicuous manner and in visual proximity to the request for consent prior to the purchase,” the complaint said. They also must obtain consumers’ affirmative consent prior to charging their payment methods in connection with the subscriptions and provide an acknowledgment that includes the automatic renewal offer terms, while identifying a “cost-effective, timely and easy-to-use mechanism for consumers to cancel their subscriptions.”

The enrollment process for a SimpliSafe subscription on the company’s platform “uniformly violates each of the core requirements of the ARL,” alleges the complaint. SimpliSafe “makes it exceedingly difficult and unnecessarily confusing for consumers to cancel” their subscriptions, it said. The company violates the ARL by failing to present automatic renewal offer terms in a clear and conspicuous manner and in visual proximity to the request for consent to the offer before the purchase agreement is fulfilled, the complaint said.

Also in violation of the ARL, SimpliSafe’s acknowledgment fails to provide automatic renewal offer terms, the cancellation policy or information on how to cancel the subscription in a way the consumer can retain, the complaint said. The acknowledgment fails to disclose a toll-free telephone number or describe another cost-effective, timely and easy-to-use means for cancellation. SimpliSafe “makes it exceedingly difficult and unnecessarily confusing” for consumers to cancel their SimpliSafe subscriptions, it said.

The plaintiff claims violation of California’s Unfair Competition Law, False Advertising Law and Consumers Legal Remedies Act; conversion; unjust enrichment/restitution; negligent misrepresentation; and fraud. He seeks actual, compensatory, statutory and/or punitive damages, prejudgment interest, attorneys’ and legal fees, an order of restitution and equitable monetary relief, plus injunctive relief.