The Washington state Attorney General has announced a $3 million settlement against a Seattle-based beauty products subscription company for deceptive marketing practices.
Attorney General Bob Ferguson says Julep Beauty Inc. lured consumers into its subscription service by offering "welcome baskets" without properly disclosing the company was also signing those consumers up for a monthly subscription that started at $19.99 a month.
Consumers only realized the problem, when the charges occurred on their credit cards.
Ferguson said the company then made it extremely difficult for consumers to cancel the service.
"What's deceptive or unfair. That's the test," Ferguson said in an exclusive KING5 interview. "Is it a deceptive or unfair business practice? If they aren't disclosing key issues to you in a fair way, that's deceptive."
Ferguson estimated roughly 55,000 consumers nationwide were negatively impacted by the company between December 2012 and September 2015.
"Anytime you have tens of thousands of consumers who are deceived into getting this monthly subscription that they wanted no part of and didn't want to pay, that raises the profile, combined with the fact that those consumers had such a hard time canceling the service once they realized they were in it," Ferguson said.
As part of the settlement, Julep will pay $1.5 million in restitution to affected subscribers, $250,000 in costs and fees, and provide another $1 million in products to people in need.
"We feel this is a fair resolution for the conduct in this case," Ferguson said.
In a statement, Julep owner Jane Park said, "I want to take this opportunity to acknowledge and take responsibility for Julep's previous practices that formed the basis of the AG's lawsuit that was settled and announced today."
Ferguson said the company has corrected its business practices so that consumers are now adequately informed about the terms of service.
Copyright 2016 KING