Attorney General Matthew J. Platkin announced that New Jersey, along with several other states, has reached a $1 million settlement with TFG Holding, Inc., an online retailer operating brands such as JustFab, ShoeDazzle, and FabKids. The agreement addresses allegations that the company misled consumers about its VIP Membership Program and made it difficult for them to cancel their memberships.
New Jersey will receive $187,205 from the settlement. Seventy-six residents affected by these practices are expected to get an average refund of $2,463 each.
“TFG Holding elevated profits above transparency and honesty,” said Attorney General Platkin. “New Jersey consumers deserve to know that the deal they are getting is the deal they were promised and that their trust is not violated in the marketplace.”
Elizabeth M. Harris, Acting Director of the Division of Consumer Affairs, stated: “Consumers have the right to know what they are purchasing with their money. Locking people into monthly payments without their express consent is against New Jersey’s consumer protection laws.”
TFG Holding’s VIP Membership Program offered discounted pricing but automatically charged members $49.95 monthly unless they made a purchase or logged in to skip the charge before the sixth day of each month. These charges accumulated as store credits for future use. Some customers were charged hundreds or thousands of dollars without realizing it.
Under the settlement terms, TFG will provide automatic refunds to those who joined a membership program before May 31, 2016, made only one purchase, and never skipped a payment.
The company was accused of violating state consumer protection laws by misrepresenting product prices on its websites; enrolling consumers in recurring payment programs without proper consent; making cancellation difficult; and failing to disclose important information about enrollment in its VIP Membership Program.
TFG Holding must now comply with all relevant laws and clearly disclose membership terms—including enrollment details, recurring charges, and cancellation rights—to consumers. The company must also stop representing offers as time-sensitive unless true; obtain informed consent before enrolling anyone in paid memberships; provide an easy way for customers to cancel online; promptly process cancellations; allow refunds for charges from the past year upon request; and cease billing certain older members unless they have interacted with their accounts since enrollment.
Additionally, TFG will provide automatic restitution to eligible customers who enrolled prior to May 31, 2016 but did not make further purchases or skip payments after joining. Restitution will also be available for unresolved complaints filed within 90 days of the settlement’s effective date.
The settlement was negotiated by representatives from Washington D.C., Pennsylvania, Maryland, and Texas. Other participating states include Alabama, Arkansas, Colorado, Connecticut, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, North Carolina, North Dakota, New Hampshire, New Mexico, Nevada, Ohio, Oklahoma, Oregon, Rhode Island,Tennessee,Vermont,Wisconsin,and Washington.
Deputy Attorney General Amanda McElfresh managed this case for New Jersey under supervision from Deputy Attorney General/Assistant Section Chief Chanel Van Dyke and Deputy Attorney General/Section Chief Jesse J. Sierant from the Division of Law’s Affirmative Civil Enforcement Practice Group.
