Capitol News

Michigan Attorney General Dana Nessel has announced a $1 million multistate settlement with TFG Holding, Inc., an online clothing retailer operating brands such as JustFab, ShoeDazzle, and FabKids. The agreement addresses allegations that the company engaged in deceptive advertising and billing practices related to its VIP Membership Program.

According to the Michigan Attorney General’s office, TFG Holding was accused of misleading consumers about product pricing and automatically enrolling them into a recurring membership program without clear consent. Consumers were charged $49.95 per month unless they made a purchase or logged in to skip the charge by the sixth day of each month. The monthly fees accrued as store credits for future purchases.

The settlement claims that TFG Holding violated consumer protection laws by misrepresenting prices, enrolling consumers without authorization, making it difficult for customers to cancel memberships, and failing to disclose key terms of the VIP Membership Program.

“Consumers deserve clear information about the memberships they sign up for, and they should be able to cancel and stop paying for ones they didn’t mean to buy or just don’t want anymore,” Nessel said. “My office remains committed to working with attorneys general across the country to protect residents from deceptive business practices.”

Under the terms of the settlement, TFG Holding must clearly disclose all material terms of its membership program, including recurring charges and cancellation rights. The company is required to obtain express informed consent before enrolling customers in any membership program and provide a simple online mechanism for cancellation. It must also honor cancellation requests promptly and stop billing further charges.

Additionally, TFG Holding will provide automatic restitution for certain consumers enrolled before May 31, 2016, who made only an initial purchase and took no further action on their accounts. Restitution will also be available for those with unresolved complaints or who file new eligible complaints within 90 days of the settlement’s effective date.

The company will pay $1 million to participating jurisdictions involved in investigating these practices. The settlement was negotiated by attorneys general from the District of Columbia, Pennsylvania, Maryland, and Texas. Michigan joins more than 30 other states in this agreement.