People who signed up for charity events were charged millions in ‘junk’ fees, feds say
People who paid to participate in charity races and other events were hit with more than $300 million in “junk” fees for a membership they unknowingly signed up for, according to the Consumer Financial Protection Bureau.
Now a popular payment system is being sued.
Active Network, an event registration platform, is accused of deploying “digital dark patterns and online trickery” to coax people trying to register for community events into signing up for its paid membership club, Active Advantage, federal officials said.
The Texas-based company provides payment services and has been used by YMCA camps, the Girl Scouts and charity race organizers to register event participants.
Since July 2011, CFPB said Active Network has raked in hundreds of millions in membership fees from some 3 million customers who unknowingly subscribed to its discount club, according to the lawsuit filed Wednesday, Oct. 18. The complaint further accuses Active Network of sneaking charges onto consumers’ annual bills and failing to notify them of membership price increases.
“People who thought they were just signing up to run in a charity race found out too late that the company was running away with their money,” CFPB Director Rohit Chopra said in a statement.
Active Network called CFPB’s lawsuit “frivolous and without merit.”
“The Active Advantage product, the target of today’s action, has been reviewed by multiple federal and state regulators, including the Federal Trade Commission,” a company spokesperson told McClatchy News in a statement. “Active Advantage has nothing to do with the provision of consumer financial services, making the CFPB’s action outside the scope of the agency’s authority. This matter is immaterial.”
What’s a dark pattern?
In its complaint, the CFPB said consumers were duped into joining the annual membership through the use of dark patterns — or deceptive features built into a company’s website to get users to click certain links, subscribe or buy products.
Active Network is accused of using these deceptive practices to boost enrollment in its membership club, according to federal officials.
“When consumers are enrolling in an event, ACTIVE inserts a web page into the registration and payment process that includes a button, typically labeled ‘Accept,’ that, when clicked, enrolls the consumers in ACTIVE’s discount club membership called ‘Active Advantage,’” the complaint reads.
Users click “accept” thinking they’re paying for an event, but are instead being signed up for a trial membership.
The CFPB’s lawsuit calls for Active Network to reimburse affected customers, pay a fine and stop its “unlawful “enrollment” process, according to the agency.
To report dark patterns and other deceptive tactics, consumers can contact the CFPB at (855) 411-CFPB (2372) or visit the agency’s website.
This story was originally published October 20, 2022 at 9:10 AM.