SONOMA COUNTY DISTRICT ATTORNEY SETTLES CIVIL CONSUMER PROTECTION ACTION AGAINST NAKED WINES

Sonoma County District Attorney Jill Ravitch announced today that her office, together with the District Attorneys of Alameda, Napa, San Diego, and Shasta Counties, settled a consumer protection lawsuit against Nakedwines.com, Inc. (“Naked Wines”), an online seller of wine. The complaint, which was filed in San Diego County Superior Court, alleges that Naked Wines violated California’s Automatic Renewal Law.

The Automatic Renewal Law is an important consumer protection statute. It protects consumers who sign up to automatically receive, and be charged for, products or services. If a business is going to keep billing the consumer’s credit card or other means of payment, then the business is required to make certain clear and conspicuous disclosures both before and after enrolling customers in automatic renewal agreements, including the amount of the recurring charges, the period of time before the consumer will be charged again, and a description of the cancellation policy.

The complaint alleges that Naked Wines violated the Automatic Renewal Law with respect to two of its programs: “Wine Angel,” a program in which consumers are automatically charged $40 per month and can use the accrued money for future purchases of select wines; and “Wine Genie,” a program in which customers are charged monthly for automatic wine shipments.

The complaint alleges that the enrollment process for both programs failed to include the required pre-purchase disclosures regarding automatically recurring charges, provided insufficient post-payment acknowledgments of recurring charges, and failed to offer a simple online mechanism for consumers to cancel the programs and stop payments.

“My office is committed to protecting consumers. The Automatic Renewal Law ensures that consumers understand that they may be agreeing to months or even years of recurring charges on their credit cards,” said District Attorney Ravitch. “Wine clubs have grown into a popular way for customers to receive regular shipments of wine. If these clubs charge customers on an automatically recurring basis, they must comply with the Automatic Renewal Law.”

Under the terms of the judgment, the Court ordered Naked Wines to comply with the Automatic Renewal Law and pay $650,000 in civil penalties and investigative costs. In addition, under the judgment, any California customer who participated in the Wine Angel or Wine Genie program since April 2017 may be entitled to a full refund by making a written request to Naked Wines. Naked Wines cooperated fully in the investigation and has taken steps to improve its disclosures and sign-up process.

The case was prosecuted by Chief Deputy District Attorney Matthew Cheever. Consumers may report false advertising or unfair business practices to the District Attorney’s Environmental and Consumer Law Division (ECLD) by calling (707) 565-5317 or emailing ECLD@sonoma-county.org.