Activewear, activewear. Getting ripped off in my activewear.
Kate Hudson is known for her yoga-toned body, so in these days of celebrity lifestyle brands, it made perfect sense that she would parlay her fitness passion into a lucrative activewear brand.
However, the business model of the resulting brand, Fabletics, is questionable, and customers are now accusing Hudson and her business partners of scamming them.
Fabletics operates on a subscription basis — something which many customers say they were unaware of when they signed up.
Customers who sign up for the company’s “VIP Membership” get substantial discounts off the retail price, but they’re charged US$49.95 each month unless they opt out.
According to a BuzzFeed investigation, the company has faced a litany of complaints from consumers who are unhappy with its business practices, saying they believed they were making a one-off purchase but were deceived into signing up for the monthly subscription.
Customers who sign up for VIP Membership are under no obligation to buy each month, but unless they opt out between the 1st and the 5th of each month, they’re charged the US$49.95 monthly subscription fee.
If you don’t know you’re signed up, it’s difficult to opt out.
It took the BuzzFeed reporter six-and-a-half minutes to cancel her subscription over the phone (there is no online option to cancel).
The billion-dollar parent company of Fabletics, JustFab, is run by two men with a history of this kind of marketing, Adam Goldenberg and Don Ressler.
Customers of their various enterprises have regularly complained of being deceived into recurring credit card payments that are difficult to cancel.
The Goldenberg’s most notorious of schemes was Sensa, a weight-loss powder, which made more than $300 million in sales before the Federal Trade Commission stepped in.