“Had the plaintiff been provided this notice in a timely manner, he would have cancelled his membership and not gone forward with the auto-renewal,” the lawsuit states.
A proposed class-action lawsuit accuses Costco of deceiving customers by renewing their annual memberships without providing adequate notice.
According to OregonLive, the lawsuit was filed last month in a California court. It accuses the Washington-based company of violating state law by not giving customers enough time to cancel their memberships before automatically renewing them.
Attorneys for the lead plaintiff, Russel George, say that Costco sends customers an email reminder 60 days prior to charging their credits for another year’s worth of membership. The lawsuit claims that this timeframe is outside the 45-day window set by California’s Automatic Renewal Law.
The Automatic Renewal Law, which took effect in July 2025, was designed to make cancelling recurring memberships easier. It also sets requirements for when and how notifications should be distributed prior to renewal. Under the law, reminders must be sent out no more than 45 days—and at least 15 before—a subscription renewal is processed.
The lawsuit argues that, by sending out its reminder early, Costco broke the law.
“Due to Costco’s untimely and deficient auto-renewal notice, the plaintiff was deprived of information he was statutorily entitled to that would have notified him of the upcoming auto-renewal and provided him with methods of cancellation,” the Costco class action lawsuit said.
“Had the plaintiff been provided this notice in a timely manner, he would have cancelled his membership and not gone forward with the auto-renewal,” the lawsuit states.
PennLive.com notes that the same California law requires that “consumers must be able to cancel using the same method of communication as used to enroll in the plan or the method that the consumer generally interacts with the business.” Companies are also required to offer “a toll-free phone number, email address, or other easy-to-use cancellation method.”
Costco currently offers two membership levels: a $65 annual membership and a $130 executive membership. This isn’t the first time its prices and practices, along with those of its competitors, have come under scrutiny. In 2024, the Federal Trade Commission tried to establish nationwide “click-to-cancel” rules that would have made cancelling memberships as easy as enrolling. An appeals court presented the rule from taking effect, with a judge finding that the agency hadn’t followed proper procedure in introducing and approving the change.
A preliminary hearing is scheduled for June.
Sources
Costco hit with another class action lawsuit
Costco is facing a new class-action lawsuit that takes aim at memberships
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