5 CA Counties Settle Consumer Protection Suit With Naked Wines

NAPA, CA — Napa County District Attorney Allison Haley announced Thursday that her office, together with the district attorneys of Alameda, San Diego, Shasta and Sonoma counties, settled a consumer protection lawsuit against Nakedwines.com, Inc. — Naked Wines — an online seller of wine.

Under the terms of the judgment, the court ordered Naked Wines to comply with the state of California’s Automatic Renewal Law and pay $650,000 in civil penalties and investigative costs.

The complaint was filed in San Diego County Superior Court and alleges Naked Wines violated California’s Automatic Renewal Law.

The statute 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, Haley’s office said.

The complaint alleges that Naked Wines violated the Automatic Renewal Law with respect to two programs:

— “Wine Angel,” a program in which consumers pay $40 per month and can use the accrued money for future purchases of select wines; and
— “Wine Genie,” a program in which customers pay on a monthly basis for automatic wine shipments.

The complaint alleges 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.

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, Haley’s office said.

“My office is committed to enforcing consumer protection laws,” Haley said. “The Automatic Renewal Law exists to ensure that consumers understand that they may be agreeing to months or years of recurring charges. Wine clubs have grown into a popular way for customers to receive regular shipments of wine. If these clubs charge customers on an automatically renewing basis, they must comply with the Automatic Renewal Law.”

Patch was not immediately able to reach someone for comment Thursday afternoon at the company's Napa office. We will update this post should we hear back.