TINA.org recently announced that it had filed complaints with the FTC and the Connecticut Department of Consumer Protection, urging them to investigate Hello Fresh’s marketing practices related to a campaign advertising “free” meals in order to encourage consumers to sign up for a subscription. The complaints touch on a number of issues we post about frequently, including automatic renewals, “dark patterns,” and the use of influencers. Here are some of the highlights.
TINA argues that although Hello Fresh prominently advertises “free” meals, it doesn’t actually provide consumers with free meals. Instead, HelloFresh merely provides consumers with a discount on a set number of meals over time. Notably, the marketing materials TINA attaches to the complaint include a disclosure explaining how the number of “free” meals is calculated. It will be interesting to see whether the regulators find that disclosure to be sufficient.
TINA alleges that the automatic renewal disclosures are not sufficiently clear or conspicuous. For example, they note that terms are included on the back of cards glued to mailers advertising the offer. Moreover, when consumers redeem the offer online, TINA alleges that HelloFresh only provides an abbreviated summary of the automatic renewal terms after the company has collected credit card information, in violation of the Restore Online Shoppers’ Confidence Act (or “ROSCA”).
TINA alleges that Hello Fresh employs “dark patterns” to pressure consumers into signing up for the offer. For example, when consumers start to redeem the offer online, they find a five-minute timer with the text “expiring in” that counts down and suggests that consumers will not be able to redeem the offer after the clock runs out. In reality, this just creates a “false sense of urgency” because the offer does not expire when the clock runs out.
TINA argues that Hello Fresh’s attempts to present consumers with other options when they try to cancel is also a “dark pattern” called “confirmshaming” – in other words, “guilting consumers into taking actions they had not intended.” Although various state laws require companies to make it easy for consumers to cancel subscriptions, TINA seems to take the position that even offering consumers options to change their subscriptions or obtain information about their reasons for cancelling violates ROSCA.
TINA takes issue with the way Hello Fresh’s influencers disclose their relationship to the company. Although the influencers use the #hellofreshparter hashtag, the majority of posts TINA found included that disclosure “below the fold.” In other words, consumers had to click on “more” in order to see it. The FTC has taken the position – both in a recent settlement and in their proposed edits to the Endorsement Guides – that these disclosures need to be visible without consumers having to click on anything.
It will be interesting to see whether the FTC or the Connecticut Department of Consumer Protection take action based on these complaints. Regardless of what happens in this instance, though, we’re likely to see these types of allegations repeated in many other cases over the coming year.