Diet app Noom reaches $62M settlement over allegedly hard-to-cancel renewals

Affirm debuts super app to help consumers gain back spending power

Affirm co-founder and CEO Max Levchin discusses his plan to streamline consumer finance on ‘The Claman Countdown.’

Noom, Inc. has agreed to pay $62 million to settle a class action lawsuit from former customers who allege that the weight loss app provider lured them into "risk-free" trial periods and then continued to charge them hefty, automatic renewal fees that were tough to cancel.

Noom, Inc. logo (Noom)

The company denies any wrongdoing, and the settlement still has to be approved by the U.S. District Court in the Southern District of New York.

The plaintiffs accuse Noom of collecting nonrefundable renewal payments for its Healthy Weight Subscription as long as eight months beyond the expiration of the trial, tallying as much as $199 for individuals.

Noom weight loss app images (Noom)

NEW PELOTON CEO'S FIRST COMPANY MEETING CRASHED BY ANGRY LAID-OFF WORKERS

As part of the preliminary deal, Noom has agreed to now send email reminders to customers ahead of the expiration of their trials, and to make it easier to cancel subscriptions both on their mobile app and website.

Noom co-founders Saeju Jeong and Arten Petakov posted a joint message on the company's blog on Monday acknowledging the agreement that was filed Friday, saying, "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."

Lisbon, Portugal – 3 November 2021; Saeju Jeong, Co-founder & CEO of Noom, on HealthConf Stage during day two of Web Summit 2021 at the Altice Arena in Lisbon, Portugal. (Photo By Sam Barnes/Sportsfile for Web Summit via Getty Images) (Photo By Sam Barnes/Sportsfile for Web Summit via Getty Images / Getty Images)

GET FOX BUSINESS TO GO BY CLICKING HERE

The founders noted that not only has Noom made changes that allow easier cancellations over the past 18 months, the company has also bolstered its customer service team, simplified its pricing, and clarified subscription details.

Reuters contributed to this report.

Source: Read Full Article