Online clothing retailer settles suit with prosecutors in Santa Cruz, Santa Clara counties

An online fashion retailer paid $1.8 million to settle a consumer protection lawsuit brought by the District Attorney’s Office in Santa Cruz and Santa Clara counties.

Justfabulous, Inc., was accused of illegally misleading customers using its popular personal shopper websites.

Prosecutors alleged that JustFab.com, Fabkids.com, Shoedazzle.com, and Fabletics.com did not “clearly and conspicuously” explain that its advertised discounts require a monthly and automatically-charged subscription fee.

For example, Justfab.com charges $39.95 a month for its membership. Prosecutors say that wasn’t made clear and consumers weren’t explicitly informed of what they were signing up for an how much it would cost them.

Justfabulous, based in El Segundo, uses a subscription program for its website for its websites that offers discounts on such things as yoga pants, women’s shoes, and children’s outfits.

An investigation showed that some consumers who purchased items on these sites – often after completing an online fashion “quiz” – were not aware that they were now obligated to pay a monthly fee. The fee was only waived if customers followed a specific process to opt out every month.

State law requires such subscription services to be “clearly and conspicuously” explained on such websites, usually using bold and/or colorful font that can easily be seen and is placed near the discounted offer.

California consumers who were misled into paying monthly subscription fees will be notified through a class action suit as to how they can make a claim for restitution.