Age of Learning, Inc. also doing business as ABCmouse agreed to pay $10 million to settle the allegations of the Federal Trade Commission (FTC) that it violated consumer protection laws.
ABCmouse is an online children’s education company based in Southern California. It operates a learning website where parents can access educational content for children ages 2 to 8 years old by paying a membership fee— typically from $9.95 per month to $59.99 for 12 months.
FTC allegations against ABCmouse
In the complaint, the Commission alleged that ABCmouse violated the FTC Act and the Restore Online Shoppers’ Confidence Act (ROSCA) by engaging in unlawful billing and marketing practices from 2015 to at least 2018.
The company allegedly failed to disclose material information regarding its $59.95 special offer membership fee for 12 months and other term memberships that automatically renew.
In addition, ABCmouse allegedly misled consumers about its enrollment and cancellation practices. The company did not disclose to consumers who tried the 30-day free trial or the 12-month membership that they were enrolled in a negative option plan. It means the company charged consumers automatically at the end of the period and every year after until they affirmatively cancel the plan.
