Washington State Attorney General Bob Ferguson today filed a lawsuit against a Philadelphia-based online company called Stroll for using “deceptive marketing tactics to lure millions of customers nationwide,” including more than 38,000 in Washington state.
Ferguson is suing the company for violation of the federal Restore Online Shopper’s Confidence Act (ROSCA) and the state’s Consumer Protection Act over issues related to a negative option program. Washington is the first state to bring an action under ROSCA.
Stroll operates a brand called Pimsleur Approach, which sells audio language learning software. In the lawsuit, filed today in the United States District Court for the Western District of Washington, Ferguson argues that customers who purchased the company’s $9.95 language courses “were unknowingly and automatically enrolled in a ‘negative option’ purchase plan, which obligated them to receive up to four advanced-level additional courses at a cost of $256 each.”
“The company hid the terms of the negative option program in its advertising, and misled consumers into thinking they’d only ordered the inexpensive introductory course for $9.95,” Ferguson said in a statement. “Consumers were shocked to find significant charges appearing on their credit card statements for products they hadn’t ordered, and then angered when the company refused to cancel those charges.”
The lawsuit also notes that despite a money back guarantee and a “risk-free 30-day trial,” the company made it difficult to cancel enrollments or return items that customers had not ordered.
“Defendants also send threatening collection letters to customers who refuse to pay,” the lawsuit reads. “They place a partial Social Security Number on their collection letters, and threaten to send delinquent accounts to a collection agency, even though Defendants do not have the customer’s Social Security Number and do not intend to send the account to a collection agency.”
Stroll is accused of failing to clearly disclose the terms of its negative option sales program; failing to obtain agreement from consumers to sign up for the program; failing to provide simple mechanisms to cancel the program as required by law; making misrepresentations in the context of its advertising; and using unfair methods in its collection practices.
The Pennsylvania Attorney General has also filed a similar lawsuit against Stroll. We’ve reached out to Stroll and its CEO Daniel Roitman for comment.
Update, 5:25 p.m. —
Here’s a statement from Roitman (Internet Order LLC is the parent company of Stroll):
“Our company was surprised to learn about this lawsuit as we’ve been working closely with the AG and thought we were making substantial progress.
Internet Order LLC has always sought to comply with the letter and spirit of the law, to be truthful in our marketing, to treat each of our customers with respect and to respond to each and every customer inquiry quickly and accurately. I remain optimistic that the company will be able to resolve this matter quickly.
For over a decade we’ve helped millions of people expand their horizons by learning a new language. We’re very proud of the work we do and are looking forward to putting this matter behind us.”