Swipe left on subscription traps: what the eHarmony decision means for your business
If your business sells anything on a subscription, like memberships, plans, "from $X/month" pricing or auto-renewals, the Federal Court's recent decision against eHarmony is essential reading.
Read on to make sure your bold marketing doesn't turn into a day in court.
What happened
Following action brought by the ACCC, the Federal Court found that eHarmony misled consumers about the price, renewal and duration of its online dating memberships - across both its website and its app - in breach of the Australian Consumer Law.
In plain English, the problems were:
"Free" that wasn't really free - Consumers were offered free dating, but couldn't actually keep communicating with other members without paying.
Auto-renewals buried in the fine print - Memberships automatically renewed for 12-months, sometimes at prices several times higher than the original sign-up, and the renewal terms were shown in small font late in the purchase process and in the terms and conditions, rather than up front.
"One-month" memberships - The shortest period a consumer could actually sign up for was six months.
Cancellation that wasn't really available - Consumers were led to believe they could cancel early when they couldn't.
"From $XX/month" pricing with a catch - Paying monthly triggered an extra mandatory fee that wasn't made clear, and the total minimum cost of the subscription wasn't displayed as a single, prominent figure.
The ACCC brought the case after receiving hundreds of consumer complaints. Penalties and other orders will be decided later, but the finding itself is the warning.
The two ideas every business should take away
1. "Dark patterns" and subscription traps are squarely on the ACCC's radar.
Regulators are actively looking at design choices that nudge consumers into commitments they didn't fully understand. Things like confusing wording, disclosures hidden in small text, or terms that only surface once someone's already halfway through checkout. If a key term would change someone's decision to buy, it needs to be clear and prominent before they commit, not tucked into clause 14.3.
2. If you advertise a price in instalments, the total minimum cost has to be shown clearly too.
Under the Australian Consumer Law, when you promote a price broken into instalments - "$29/month", "from $15/week" - the single, minimum total amount a customer will actually pay must also be displayed clearly and prominently. A "from $XX/month" headline with the real total buried in fine print isn't enough.
Where businesses get caught out
The uncomfortable truth is that most businesses in eHarmony's position aren't trying to trick anyone. These issues creep in through ordinary, well-intentioned decisions:
A marketing team leads with the lowest possible "per month" number because it converts better.
A developer defaults new sign-ups to auto-renew because that's standard practice.
The full terms live on a separate page nobody reads.
Nobody stress-tests whether the headline claim matches the actual experience of buying.
Individually, each choice feels reasonable. Together, they can add up to conduct a court considers misleading.
How Legalite helps you stay bold and compliant
At Legalite, we believe good compliance shouldn't sacrifice good marketing. Two of our practices are built for exactly this:
Marketing & Promotions. We help you run bold campaigns that are fully compliant with consumer and competition law. That means reviewing your pricing claims, "free" offers, subscription flows and promotional wording before they go live - so your advertising does the heavy lifting without exposing you to ACCC action or consumer complaints.
Commercial Law. We review and draft the terms and conditions, subscription agreements and cancellation and renewal policies sitting underneath your offers - making sure what your customers are actually agreeing to matches your marketing promises.
A quick health-check on your checkout flow, your subscription terms and your headline pricing is a fraction of the cost - financial and reputational - of getting it wrong.
Ready to pressure-test your subscriptions and pricing?
If your business runs memberships, plans, free trials or "from $X/month" advertising, now's the time to make sure it all holds up. Book a discovery call with the Legalite team - we'll help you keep your marketing bold and your business protected.