Online children’s education company Age of Learning will pay $10 million under a proposed settlement order reached with the Federal Trade Commission on Wednesday to resolve charges that it billed tens of thousands of consumers for renewed memberships without their consent.
Age of Learning operates the membership-based online learning tool ABCmouse Early Learning Academy designed for children between 2 and 8 years old.
“ABCmouse didn’t clearly tell parents that their subscriptions would renew automatically, and then the company made it very difficult for them to cancel,” said Andrew Smith, director of the FTC’s Bureau of Consumer Protection, in a press release. “People are relying more than ever on remote learning and other online services, and companies need to be up-front about automatic renewals and get permission before charging customers.”
In his statement, FTC Commissioner Rohit Chopra pointed out that this practice goes beyond ABCmouse’s tactics. “Dark patterns exist across the internet,” he said. “Online services employ user experience designers who optimize design to ensure that sign-up flows are easy. But, the seedier side of the user experience designer’s job is to frustrate users when it comes to ending a subscription or deleting an account, or by deceiving users directly.”
Chopra cited other companies—like Uber, Microsoft, Google, and Facebook—that allegedly engage in similar tactics. “Digital deception should not be a viable American business model,” he said. “If the Federal Trade Commission aspires to be a credible watchdog of digital markets, the agency must deploy these tools to go after large firms that make millions, or even billions, through tricking and trapping users through dark patterns.”
“We cannot replicate the whack-a-mole strategy that we have pursued on pressing issues like fake reviews, digital disinformation, and data protection,” he added. “Instead, we need to methodically use all of our tools to shine a light on unlawful digital dark patterns, and we need to contain the spread of this popular, profitable, and problematic business practice.”
“ABCmouse was undoubtedly a roach motel,” said Chopra. “Through the dark patterns detailed in the FTC’s complaint, ABCmouse deployed tricks to lure families into signing up for its service, and traps to prevent them from cancelling.”
According to the FTC, the company failed to adequately disclose key membership terms when marketing ABCmouse to consumers from 2015 until at least 2018. ABCmouse advertised “Special Offer” 12-month memberships for $59.95 but “failed to disclose material information about these and other term memberships, including that they automatically renew,” the complaint states.
The FTC’s complaint further alleges ABCmouse made it difficult to cancel automatic renewals. According to the complaint, consumers who tried to cancel by calling, e-mailing, or submitting a customer support form were, instead, required “to find and navigate a lengthy and confusing cancellation path that repeatedly discouraged consumers from canceling and, in many instances, resulted in consumers being billed again without their consent,” the complaint states.