Audible and Amazon Sued for Unlawful Business Practices
On March 10, 2017, Soderstrom Law PC filed a class action complaint in Los Angeles federal court on behalf of consumers nationwide against defendants Audible, Inc. and Amazon.com, Inc.
The lawsuit is trying to recover for consumers millions of dollars of damages caused by Audible and Amazon’s unlawful business practices, and to obtain a court order that stops Audible and Amazon’s false advertising tactics, unfair credit expiration policies, and deceptive credit card charging policies. The lawsuit has already gained attention from the national legal press, including Law360.com (https://www.law360.com/articles/900945/audible-amazon-hit-with-suit-over-audiobook-credit-scam) and Courthouse News Service http://www.courthousenews.com/class-accuses-audible-amazon-bait-switch/).
Unlawful Advertising Tactics
Audible and Amazon’s advertising tactics violate state and federal laws by telling consumers that “one credit equals one audiobook,” credits “never expire,” and you can cancel your membership at any time with “no strings attached.” The problem is that each of these statements is provably false simply by looking at the companies’ own rules and policies posted in fine print on their websites. Credits do expire. One credit does not equal one audiobook. And if you cancel your membership you immediately forfeit all of your prepaid credits with no refund.
Audible and Amazon also rely on so-called “credits” that are really disguised gift cards that violate state and federal laws because the credits expire within months (and in some cases days) but gift cards cannot expire within 5 years (or ever in California). Simply calling a gift card a “credit” does not shield Audible and Amazon from the gift card laws, which apply to transactions where (i) a consumer buys a “card” that is redeemable only by the issuer, (ii) the card is issued in a specified amount, (iii) the card is prepaid, and (iv) the card can be redeemed for a good or service. Simply replace “card” with “credit” and you have Audible’s prepaid “credit” business model.
Unconscionable Terms and Conditions
Audible and Amazon also hide unfair and unlawful provisions in their fine print “terms and conditions” posted on their websites. One of these unlawful provisions tries to allow Audible to access a member’s Amazon account and charge any credit card on file if the card given directly to Audible is declined for any reason. Neither Audible nor Amazon tell you they are doing this, and they do not even agree only to charge the member’s own card. This means anyone who shares an Amazon account with an Audible member can have their credit card charged by Audible without their authorization for a plan they never purchased.
Insufficient Payment and Cancellation Disclosures
Yes, there’s more. California and other states’ laws require companies to make specific disclosures to consumers when they seek authorization to make automatic renewal payments on recurring or subscription services like a monthly or annual Audible membership plan. The required disclosures include not only the specific payment policies but also the relevant cancellation policies. Audible and Amazon violate these laws by providing only vague, non-specific disclosures about their automatic payment policies, and by hiding the harsh cancellation terms while promising consumers can “cancel anytime” with “no strings attached.”
Continuing to Investigate Claims
Soderstrom Law PC is continuing to investigate these claims and similar ones against Audible and Amazon, and against many other companies that use similar advertising tactics and business practices that are unlawful under state and federal laws.