ABCmouse Agrees to Pay $10 Million in Settlement Charges

Written by Kristen Schmutz

Belden Communications News

The Federal Trade Commission announced today that the popular kids' program ABCmouse has agreed to pay $10 Million in settlement charges for deceptively marketed memberships.

The online provider of educational content for kids has failed to explain that memberships would automatically renew and make canceling the service hard. Consumers have reported to the FTC that they have paid for a year-long subscription but once the year is up, they find an unauthorized charge for another year of service.

Despite the programs “Easy Cancellation” claims, consumers have to jump through hoops to cancel their memberships. Parents who were able to cancel, find they have only canceled a “base membership,” and are still being charged for other services.

Currently, the FTC is working to refund money to people who have had their memberships renewed without permission, or to those that over been charged after attempting to cancel. 

Going forward, ABCmouse will also disclose important details about a membership when people sign up including:

• how much it costs
• how long it lasts
• whether it renews
• how people can cancel it

The FTC warns consumers If a business won’t give you a refund for a credit or debit card charge that's inaccurate or unauthorized, and won’t stop making automatic charges to your account, here’s what you can do:

• File a dispute (also called a “chargeback”) with your credit or debit card company.
• Contact the company that’s charging you. Tell them to cancel your subscription. Keep a copy of your cancellation request or your notes about who you talked to and when you canceled. 
• Watch your bank statements for new charges that you might need to dispute.
• Report it to the FTC at http://ftc.gov/complaint.