A popular US retailer that has made it its mission to upend Victoria’s Secret has agreed to settle a lawsuit over claims that it deceived shoppers with its billing tactics.
AdoreMe, which launched in 2011 and opened its first store in New York last year, will pay $1.38 million (£1 million) to resolve the Federal Trade Commission (FTC) lawsuit, reports Bloomberg.
The FTC sued the underwear retailer on Monday, alleging the company violated the Restore Online Shoppers Confidence Act by making it difficult for shoppers to cancel subscription memberships and halt credit card charges.
Adore Me promised that customers could use store credits at any time, but the complaint found that the company revoked unused credits after customers cancelled their memberships. The settlement will be used to pay customer refunds.
“Consumers have suffered and will continue to suffer substantial injury,” the FTC wrote in its complaint, if Adore Me was allowed to continue these practices. Adore Me didn’t admit to or deny any wrongdoing in its settlement. A representative for Adore Me did not immediately respond to a request for comment.
The news comes six months after Hanesbrands took AdoreMe to court over a patent for a push-up bra.
The group’s Maidenform unit accused the company of infringing its patent for a bra designed to boost the wearer’s breasts by two cup sizes with a dual-layer design, reports Law360.
But the parties reached an undisclosed settlement soon after.
Victoria’s Secret currently controls nearly 62% of the US intimate apparel market, according to IBISWorld, but AdoreMe believes that recreating its online personalised shopping strategy with a unique, curated, by-appointment-only experience in physical stores will revolutionise the way people shop for lingerie and thereby challenge L Brands’ flagship brand.
In an interview with Business Insider, Adore Me director of business and brand development Sharon Klapka said: “We aim to slay Victoria’s Secret.”