Yelp offers a $300 promotional credit for businesses to advertise on Yelp. Once the $300 credit is used, businesses are charged for their ad spend. The company does not send confirmation of sign-up. The Company also does not notify customers once the $300 credit is used, which means they will be charged for further ad spend. As a result, customers are unaware that they get charged for ad spend after the $300 promotion ends, and end up losing hundreds of dollars each as a result.
When customers complain to Yelp regarding these misleading and unauthorized charges, Yelp refuses to refund customers.
Yelp’s promotional policy may violate California’s amended Automatic Renewal Law, which was signed into law October 04, 2021 and becomes effective July 1, 2022.
Section 17602(b)(1)(A) provides that businesses will be required to send a notice explaining how to cancel 3-21 days before the expiration of a free trial or promotional price that lasts more than 31 days.
Here, Yelp’s $300 promotion lasts for a 6 month period. Yelp does not provide notice explaining how to cancel the ad spend within 3-21 days before the $300 promotional offer ends. Therefore, Yelp violates California’s Automatic Renewal Policy.
In January 2022, Yelp settled a lawsuit alleging they charged him $1,780 for advertising after cancellation. Yelp’s terms of service contain a mandatory arbitration provision.