Beachbody LLC is a Santa Monica-based fitness company owned by fitness trainer Tony Horton. It sells home exercise videos in fitness, weight loss and muscle building. It does this through a network of coaches and direct response infomercials, among other sales channels.
One of its most popular exercise programs is P90X, while others are Insanity, Focus T25, P90X2, P90X3, P90, The Asylum, Shift Shop, 21-Day Fix, 21-Day Fix Extreme, etc. It claims to have a worldwide client base of 23 million people. Everything was going well for this company until investigations threw up some alarming facts:
An investigation threw up alarming facts. The company had charged its clients repeatedly for subscription renewals, even after free trials and without their consent. While delivering his verdict, Judge Mitchell L. Beckloff, Santa Monica Superior Court, decreed that the company would have to make alterations in its sales practices by making its renewal terms known to customers. It would also have to provide a checkbox marking customers' consent. It would have to enable easy cancellations and send customers reminders of approaching renewals. All these apart from a whopping fine of $3.6 million.
The company agreed that transparency was the key to its business success and averred that they provide a money back guarantee on all their products and services to instil customer confidence. The need to have automatic renewals was felt for consumers who forget to cancel after a free trial or are not aware of their renewal dates. However, an injunction to a company to provide a separate online checkbox to customers is a first in California. This ruling was given to safeguard the rights of customers so that they are not cheated by fraudulent businesses.
Beachbody has also been asked by Californians to provide them with accurate and reliable studies that point to the health claims they make. According to prosecutors, this company falsified its claims regarding the capabilities of its products that supposedly fight inflammation, aging and mental decline.
The Santa Monica attorney's office revealed that the judgement came on the heels of an undercover investigation, and in consultation with experts in science. Negotiations with the company's attorneys spread well over two years. The judge fined Beachbody $2.6 million and another million dollar as compensation non-profit groups that advocate nutrition and community health.
The judge opined that this judgement is a win-win situation for consumers as it protects them from unfair and illegal business practices.