The New Mexico Attorney General’s Office, working alongside a coalition of 34 other state and district attorneys general, has reached a settlement with the parent company of online fashion retailer JustFab over alleged deceptive practices in the company’s online fashion membership business.
According to the state’s Department of Justice (NMDOJ), several New Mexicans reported being enrolled unwillingly or unknowingly in a JustFab membership program that charged recurring fees. The state’s AG’s Office said these enrollments were done using unfair and deceptive practices.
The settlement claims that JustFab advertised a lower price on some of its retail items that required buyers to enroll in a membership program to get it. This enrollment was allegedly advertised as “free,” but it wasn’t made clear that it involved recurring monthly payments.
According to the settlement, buyers were auto-enrolled in the membership program without their consent at checkout. Investigators said the company failed to disclose that the purchase included a membership with recurring charges in a way that was “clear and conspicuous.” They also claimed that the company’s cancellation procedures were confusing and difficult to navigate, leading some consumers to remain enrolled in the program even though they believed they’d canceled.
JustFab’s parent company, TFG Holding, has denied committing any wrongdoing or violating consumer protection laws, and the settlement doesn’t represent any sort of admission on its part. It just means that both sides have agreed to resolve the investigation.
Under the terms of the settlement, which became effective on Nov. 1, TFG Holding has to return the money that was taken from affected consumers and pay the AG offices in states that oversaw the investigation. The full multistate settlement totals about $4.8 million, with around $15,000 of it going to New Mexico.
Perhaps more importantly, the company will now have to overhaul how it does online business. The settlement requires TFG to change how it markets, enrolls, bills and cancels memberships. It’s now required to clearly and conspicuously disclose that a consumer is being enrolled in a membership program at multiple points of the online checkout process. It also has to clearly state the price and frequency of recurring charges and show the consumer’s right to cancel. Buyers will also have to read and sign off on the full terms before the company can enroll them in the membership program.
The company will now be barred from using countdown timers if the offer isn’t truly limited and will not be able to advertise membership enrollment as “free” if there are recurring charges involved. It will also have to make its cancellation process easier and accessible by any device.
Consumers who were enrolled in the membership program before May 31, 2016, made only the initial purchase (no subsequent purchases) and never skipped a payment are eligible for automatic refunds equal to what they paid after the initial purchase. To get a refund, they will have to file their complaint directly with JustFab, Shoe Dazzle or FabKids or the New Mexico AG’s office before Jan. 30, 2026.
