A little over two years ago Audible was hit with several class action lawsuits that alleged that the Amazon subsidiary had engaged in bait-and-switch tactics and false advertising and violated consumer protection laws when it limited the number of credits that a user could have in their account.
Two of the lawsuits, dubbed McKee and Weber after the lead plaintiffs, received preliminary approval from US District Judge George Wu in late March, and Chris Meadows writes over at Teleread that Audible has already informed affected users.
Note: This settlement is not to be confused with Audible’s November 2017 settlement in Quebec. That suit had to do with finer points of Quebec’s consumer protection laws concerning free trials flipping over automatically into paid subscriptions.
As part of the settlement of the Weber and McKee lawsuits, Audible has agreed to give 12 million free audiobooks to the plaintiffs, and pay $1.5 million to the lawyers.
Audible will also reimburse 8.4 million of its users for the overdraft fees they paid when the company billed them using a back up credit or debit card without authorization, and most importantly, one of the stipulations of the settlement is that Audible has to revise its disclosures, policies, adverts, and terms and give users more clarity on policies regarding auto-pay, credit expiration, and back-up card policies.
The interesting thing about the McKee lawsuit was that it argued that Audible’s credits were the equivalent of gift certificates. Federal law says that gift certificates have to be good for five years, and California law goes even further, specifying that gift certificates may never expire.
This is a problem for Audible given that the company limits users to carrying only 12 credits at a time, cancel credits that are more than 6 months old, and steals away your credits when you cancel your Audible subscription.
All of this would appear to violate federal law.
Of course, it’s not clear Audible’s policies do break the law; this is a settlement, not a ruling. But this case did survive two attempts to dismiss it before being settled, which tells me that the plaintiffs have a stronger case than Amazon would care to admit.
On the other hand, Audible has informed users of its new policies, and they do not meet federal requirements for gift certificates. Credits still expire, unfortunately; you just get to hold on to them longer.