Penalty Amount
$1,353,465
Consumers Affected
70,000
Colorado Attorney General Phil Weiser announced a settlement with Cobblestone Denver Opco, LLC (Cobblestone Car Wash) over allegations that the company used unfair automatic renewal practices for monthly membership fees. The company failed to provide proper disclosures, notices, terms, and cancellation options, locking over 70,000 consumers into auto-renewal contracts. Cobblestone will pay $1,353,465 in restitution, has already refunded $253,406 to consumers, and must comply with the Colorado Consumer Protection Act, including providing easy-to-access cancellation options and 25-day advance notice of price increases.
Cobblestone must pay $1,353,465 in restitution to over 70,000 affected consumers, pay $20,000 for investigation costs, and comply with the Colorado Consumer Protection Act. The company must provide proper documentation of auto-renewal policies, including trial period disclosures, at least 25 days' advance notice of membership price increases, and easy-to-access cancellation options (including a one-step online cancellation link). Cobblestone must also notify monthly members of any plan price changes at least 25 days in advance.
In-house legal teams should review their customer agreements and terms of service for auto-renewal and subscription provisions. Specifically, they should verify that their contracts include: (1) clear disclosure of auto-renewal terms, (2) a 25-day advance notice requirement for price increases, (3) easy-to-access cancellation mechanisms (e.g., one-click online cancellation), and (4) receipt/proof of purchase documentation. Vendor agreements with payment processors should also be reviewed to ensure they can support refunds and prorated charges. Marketing and sales contracts should be updated to ensure compliance with Colorado's auto-renewal law (HB21-1239) and the Colorado Consumer Protection Act.
Entity
Cobblestone Denver Opco, LLC
Industry
Automotive"Cobblestone Denver Opco, LLC"
"$1,353,465 in restitution to over 70,0000 affected consumers"
"HB21-1239"
"Cobblestone failed to provide proper disclosures, notices, terms, and cancellation options for these monthly subscription programs"
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