Noom reaches $56M Class Action Settlement
The diet app has reached a settlement after the company was alleged to make it difficult to cancel its subscription auto renewal
Noom has reached a $62 million class action settlement, agreeing to pay $56 million in cash and $6 million in Noom subscription credits, according to a preliminary settlement document filed in Manhattan federal court.
The weight loss app was accused of duping customers into signing up for “risk-free” trials that locked them into automatic renewals. When customers attempted to cancel, they encountered difficulties.
The FTC and State Attorney Generals have been focusing on issues surrounding automatic renewals. Consumer protection enforcement efforts are expected to increase this year. Noom has over 1,500 complaints on the Better Business Bureau site.
The class action suit was brought forth after former Noom users alleged that the diet app didn’t properly disclose the terms of its risk-free trial offer and charged them without their express consent. The suit includes former Noom users from May 2016 to October 2020 who didn’t receive refunds.
Former Noom users say the cancellation system made it difficult to nix the app. In order to cancel, Noom customers had to send a message to their assigned coach. The coach, a “bot,” would give instructions on how to cancel on the iTunes or Google Play Store. Some Noom users allege that the “coach” didn’t respond before their trial expired.
Noom will now need to enhance its disclosures and request a user select a checkbox to accept renewal. A cancel button will also be featured in order to make it easier to unsubscribe.
Critics of Noom have been sounding the alarm bell since 2020. “Do not download the Noom app. It’s the biggest scam ever and it’s virtually impossible to cancel your subscription,” wrote a user on Twitter in 2020. MakeUseOf even created a cheat sheet on how to cancel the Noom app in 2021.
In a note on Noom’s blog, co-founders Saeju Jeong and Artem Petakov addressed the class action settlement and wrote that earning and keeping the trust of Noom users is key to achieving the company’s mission.
“Today, a proposed settlement was made public to resolve a lawsuit that was filed against Noom in 2020 around some of our auto-renewal practices. While we disagree with the claims made in the suit, we believe the settlement is the best path forward as it allows us to focus our energy on delivering the best possible health outcomes for our Noomers,” write Jeong and Petakov.
Noom’s co-founders say the company has taken steps to make cancellation easier with a “100% self-service option” in the Noom app and website. The company also says it has simplified pricing and terms to make it more transparent before a user signs up for Noom’s services.
