STATE OF FLORIDA
OFFICE OF THE ATTORNEY GENERAL
DEPARTMENT OF LEGAL AFFAIRS
IN THE INVESTIGATION OF:
AGENCY FILE NO. L12-3-1143
JUST FABULOUS, INC.,
RESPONDENT.
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ASSURANCE OF VOLUNTARY COMPLIANCE
FOR JUST FABULOUS, INC.
Pursuant to the provisions of Chapter 501, Part II, Florida Statutes, the Office of the
Attorney General, Department of Legal Affairs, State of Florida ("Attorney General") has
investigated the business practices of JUST FABULOUS, INC., a Delaware corporation and
(hereafter alternatively referred to as "JUST FAB" or the "RESPONDENT").
The RESPONDENT agrees to enter into this Assurance of Voluntary Compliance (AVC),
without an admission that it has violated the law in order to amicably resolve the Attorney
General's investigation as to the Respondent, JUST FABULOUS, INC., pursuant to Agency
Case No. L12-3-1143 and Section 501.207(6) of the Florida Statutes.
The Attorney General, by the signature of her Division Director affixed hereto, does
hereby accept the instant A VC and in turn terminates the Attorney General's investigation as it
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concerns the RESPONDENT by virtue of the authority vested in the Office of the Attorney
General, pursuant to Section 501.207(6) of the Florida Statutes.
I.
DEFINITIONS
For purposes of this A VC, the following terms have the meanings set forth below:
"Negative Option Marketing" as used herein means commercial transactions in which a
seller interprets a customer's failure to take an affirmative action, either to reject an offer or cancel
an agreement, as assent to be charged for goods or services.
"Clear and conspicuous" (and/or any derivative thereof) as used herein means that a
statement, representation, claim, disclosure or term being conveyed shall be presented in a way
that a reasonable consumer would notice and understand said statement, representation, claim,
disclosure or term. The following, without limitation, shall be considered in determining whether a
statement, claim, term or representation is clear and conspicuous:
A. whether the statement, representation, claim, disclosure or term is of sufficient prominence
in terms of font, size, placement, color, contrast, duration of appearance, sound and/or speed, as
compared with accompanying statements, representations, claims, disclosures or terms so that it is
readily, reasonably noticeable and understandable, and likely to be read by a person to whom it is
directed; and if written or conveyed electronically, that is not buried on the back or bottom,
contained within unrelated information or placed on the page where a reasonable person would not
think it would be placed and/or would not think it was important to read;
B. whether the statement, representation, claim, disclosure or term is presented to the
person(s) to whom it is directed in a coherent and meaningful sequence with respect to other
statements, representations, claims, disclosures or term being conveyed;
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C.
whether the statement, representation, claim, disclosure or term is in close proximity to
the statement, representation, claim, disclosure or term that it clarifies, modifies, explains or to
which it otherwise relates;
D.
whether the statement, representation, claim, disclosure or term contradicts, or renders
ambiguous or confusing any other information with said statement, representation, claim,
disclosure or term is presented;
E.
whether, if in association with a Negative Option Plan as defined herein, the statements,
representations, claims, disclosures or terms related to the Negative Option Plan are segregated
from any other terms and conditions of the offer;
F.
whether, if the statements, representations, claims, disclosures or terms of the Negative
Option Plan as defined herein are oral, they are at an understandable pace and in the same tone and
volume as the sales offer;
G.
whether the statements, representations, claims, disclosures or terms of the Negative
Option Plan appear for a duration sufficient to allow listeners or viewers to have a reasonable
opportunity to notice, read or otherwise understand the statements, representations, claims,
disclosures or terms of the Negative Option Plan.
H.
whether the language and terms of the Negative Option Plan are commonly understood
by the consumer in the context in which they are used;
I.
whether the statements, representations, claims, disclosures or terms of the Negative
Option Plan are presented in such a way as to be free of distractions, including, but not limited to,
sounds, graphics, text or other offers that compete for the attention of the reasonable consumer;
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whether, in advertising on the Internet, the statements, representations, claims,
disclosures or terms of the Negative Option Plan are placed above the fold for any computer screen
displaying 870 vertical pixels or less otherwise on the same page as any other the statements,
representations, claims, disclosures or terms that they modify;
whether the statements, representations, claims, disclosures or terms of the Negative
K.
Option Plan appear on the Internet page on a co-registration order path in which numerous offers
for various goods and services are represented to be free, and the consumer is required to accept a
certain number of offers.
II.
1.
ATTORNEY GENERAL'S ALLEGATIONS
The Respondent, JUST FABULOUS, INC., sells womens' shoes and accessories to
consumers in Florida and throughout the United States and the world over the Internet via various
websites.
2.
Beginning at least in January, 2010, the Office of the Attorney General became aware of
hundreds of complaints from consumers wbo alleged, among other things, that they purchased
merchandise from the JUST FABULOUS, INC. website. However, consumers were unaware
that by simply making an initial purchase from JUST FAB, that they were automatically enrolled
in a membership program which required that consumers, on a monthly basis, skip a purchase,
make a purchase by a specific deadline or be charged $39.95 for a credit to be used towards a
future purchase.
3.
The Office of the Attorney General's investigation focused primarily on whether the
RESPONDENT engaged in negative option marketing to induce consumers to subscribe to the
JUST FAB membership program without providing clear and conspicuous language notifying
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consumers of the negative option clause and/or its requirements. The Office of the Attorney
General's investigation concluded that consumers were not properly made aware of the fact that
their initial purchase from the JUST FAB website triggered a negative option agreement which
imposed upon consumers automatic monthly fees, credits and/or related costs if the consumer did
not take action to actively opt out of the fees, credits and/or related costs every month.
4.
The RESPONDENT denies any wrongdoing and makes no admission of any violation of
Florida Statute 501, Part II, or any other state or federal law, statute or regulation. Further, this
A VC shall not be deemed evidence of any wrongdoing or an admission of any violation of Florida
Statute 501, Part II, or any other state or federal law, statute or regulation.
III.
NON-MONETARY TERMS AND CONDITIONS
5.
The RESPONDENT agrees to refrain from violating the provisions of Chapter 501,
Part II, of the Florida Statutes, the Florida Deceptive and Unfair Trade Practices Act, to conduct
business in the State of Florida in compliance with the provisions of Chapter 501, Part II, of the
Florida Statutes, the Florida Deceptive and Unfair Trade Practices Act and to alter its business
practices in the following manner:
A. The RESPONDENT agrees that it will not engage in and/or participate in any manner
in any negative option marketing business which operates and/or in any manner violates any
Florida statute.
B. With respect to any and all websites that the RESPONDENT uses, or shall use in the
future, the RESPONDENT agrees that it shall:
i)
Web Sites: Describe all material terms of any negative option marketing offer located
on the RESPONDENT'S websites in a clear and conspicuous manner and in a
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prominent location where it is likely that a consumer will see the terms and conditions
before the consumer incurs a financial obligation;
ii)
provide a link to the full terms and conditions of the negative option offer;
iii)
aid in the verification of each consumer's affirmative consent to the offer by having the
negative option billing terms located within 300 pixels of the button or link that the
consumer uses to complete his or her order, absent the use of any pre-checked boxes;
iv)
send an order confrrmation communication, within 24 hours of a customer's order
placement, disclosing the material terms and conditions of any negative option offer,
including, but not limited to, when and how a consumer may cancel without being
charged;
v)
clearly and conspicuously disclose to customers the material terms and conditions ofthe
JUST FAB membership program, including, but not limited to, the following:
a) that the initial purchase of an item as a VIP member from JUST FAB automatically
enrolls the consumer into a membership program;
b) that under the membership program, each month the consumer must either make a
purchase from JUST FAB by a specific deadline or notify JUST FAB in the
manner detailed in the terms and conditions of the VIP membership program that
the consumer does not wish to make a purchase.
c) that in the event a consumer fails to take any of the two (2) actions detailed in the
above paragraph, then the consumer will be charged a fee in the amount of $39.95
which the consumer may use towards a future purchase; and
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d)
that the material terms and conditions shall be placed within 300 pixels of any
button or link the consumer clicks to submit his or her order, in a clear and
conspicuous font.
C. Cancellations/Refunds: Clearly disclose to customers how and when products may be
returned and memberships cancelled and maintain adequate customer service capacity to
facilitate returns and cancellation requests that comply with the clearly disclosed procedures.
This provision specifically requires the RESPONDENT to:
i) disclose to customers whether they will incur any fmancial expense, such as postage,
shipping and/or a restocking fee if the consumer returns the product;
ii)
provide rapid and user-friendly methods for a consumer to receive an RMA number to
return any merchandise pursuant to the clearly and conspicuously disclosed return policies
of JUST FABULOUS, INC.;
iii)
fully honor and terminate the enrollment of any and all consumers' memberships who
make requests to terminate their plan pursuant to clear and conspicuous terms and
conditions detailed on the JUST FABULOUS, INC. website and not knowingly,
purposely or intentionally impede the methods of cancellation;
iv)
process requests for refunds from customers who, in accordance with the terms and
conditions of any of JUST FABULOUS, INC.'S websites, attempt and/or attempted to
cancel or terminate their orders in a timely fashion, but were unable to do so for any reason;
and
v)
enact consumer service policies and practices designed to ensure that phone, electronic
mail, live-chat and written inquiries are responded to in no more than three (3) business
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days after first receiving notice of such inquires.
IV.
MONETARY TERMS AND CONDITIONS
ATTORNEYS' FEES, INVESTIGATIVE FEES AND/OR COSTS
6.
The Respondent, JUST FABULOUS, INC., agrees to pay a total of TWENTY
THOUSAND DOLLARS AND ZERO CENTS ($20,000.00) in current and future attorneys'
fees, investigative fees and/or costs made payable by cashier's check or other certified funds to the
"Legal Affairs Revolving Trust Fund" and deliverable at the time upon which the
RESPONDENT and its attorney affix their signatures to this document and return it to the Office
of the Attorney General.
RESOLUTION OF CURRENT CONSUMER COMPLAINTS
7.
The Respondent, JUST FABULOUS, INC., further agrees to resolve the complaints of
each person listed on the spreadsheet attached hereto as "Exhibit A" in the amount of
Twenty-Nine Thousand Four Hundred Forty-Four Dollars and Twelve Cents ($29,444.12),
who are consumers who have presented complaints against the RESPONDENT to various
governmental entities, including, but not limited to, the Office of the Attorney General for the
State of Florida, to the extent that the complaints currently are unresolved. Each of the referred-to
consumer complaints shall be resolved by the RESPONDENT in full within sixty (60) days of the
date upon which this document is fully executed by all required Parties.
8.
At the end of the above-referenced 60-day period, the RESPONDENT agrees to present
to the Office of the Attorney General a notarized statement attesting to the fact that each of the
complaints in Exhibit A were resolved and to attach to the notarized statement a revised copy of
the same spreadsheet which shall be labeled "AVC Spreadsheet" and which has a new entry
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and/or column next to the name of each consumer which confirms that each consumer complaint
listed therein has been resolved and which additionally provides a clear, explanation as to the
manner in which each consumer complaint was resolved.
9.
To the extent that the RESPONDENT has insufficient information upon which to
resolve a complaint, counsel for the RESPONDENT shall promptly, and within the
above-stated period(s), notify Financial Investigator John Konopka, Jr., at (561) 837-5007,
so that he may determine if additional information is available to assist the RESPONDENTS in
resolving a specific consumer complaint.
10.
"Resolved" shall mean: 1) full payment of a consumer's complaint; 2) partial payment of
a consumer's complaint, accompanied by a formal Release and/or other document signed by a
consumer stating that a partial payment has been accepted in full accord and satisfaction of the
consumer's complaint; 3) charge-backs to a consumer's credit card; 4) cancellation of the
consumer's membership; 5) termination of all automatic billing associated with that membership;
and/or 6) any other alternative means of complaint resolution which was made to a consumer in
satisfaction of his/her complaint against the RESPONDENT.
11.
"Complaints" shall include, but not be limited to, written requests for refunds, affidavits,
corr-espondence, requests to cancel memberships and/or any other written communication which
constitutes a claim against JUST FABULOUS, INC.
12. . The Parties agree that the RESPONDENT shall not be responsible for the payment and/or
resolution of any consumer complaints listed on the attached spreadsheet which have already been
resolved as defined herein and/or which do not relate to an actual customer of JUST FABULOUS,
INC.
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13.
The Parties further agree that the RESPONDENT shall not be responsible for any
payments and/or refunds in excess of the amount actually paid by a complaining consumer to
JUST FABULOUS, INC.
14.
The RESPONDENT'S interest in funds paid in conjunction with this A VC shall fully and
completely divest when the A VC is fully executed by all Parties.
V.
PENALTIES
15 .
Provided that the RESPONDENT complies with the terms of this AVC, no civil penalties
shall be sought against it or imposed hereunder for any conduct arising prior to the date of the
execution of this A VC. However, in the event that the RESPONDENT fails to comply with the
terms and conditions of this A VC and if such failure is not cured within fourteen (14) days
following receipt of written notice from the Office of the Attorney General, then such action is by
statute prima facie evidence of a violation of Chapter 501, Part II, Florida Statutes as to the
RESPONDENT, and the RESPONDENT agrees that such violation(s) will subject the
RESPONDENT to any and all civil penalties, sanctions any other available relief permitted by
law. This AVC shall not prevent the RESPONDENT from raising any and all defenses to such
alleged violations and related penalties and/or sanctions.
16.
In the event that the RESPONDENT fails to make any payment(s) required by the terms
of this A VC within the time period provided by the A VC, then such non-payment shall constitute a
material breach and default of the terms of the A VC.
17.
The RESPONDENT moreover consents to venue and jurisdiction for the entry of a Final
Judgment, or any other proceeding necessary to enforce the terms of the A VC, within the Fifteenth
Judicial Circuit Court, in and for Palm Beach County, Florida.
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VII.
MISCELLANEOUS TERMS
18.
The Respondent, JUST FABULOUS, INC., shall further ensure that all of the terms and
conditions of this A VC are known to its representatives, agents, employees, managers, officers,
directors, assigns, successors, independent contractors and/or any other persons acting under, by,
through or on its behalf. The obligations imposed by this A VC are continuing in nature and shall
apply to the RESPONDENT'S successors and assigns as well as any and all new representatives,
agents, employees, managers, officers, directors, assigns, successors, independent contractors, any
other person acting under, by, through or on its behalf and/or any other persons who become
engaged in the business activities of the RESPONDENT.
19.
The RESPONDENT shall not implement any change in the form of doing business or the
organizational identity of any of the existing business entities or create any new business entities as
a method of avoiding the obligations and terms and conditions set forth in this AVC.
20.
The RESPONDENT agrees to preserve and retain all relevant business and financial
records relating to the acts and practices at issue in this A VC and other information reasonably
sufficient to establish compliance with the provisions of this A VC for two (2) years from the date
of this AVC, and shall provide reasonable access to such documents and information to the
Department upon request.
21 .
Nothing herein shall be construed as a general waiver of any private right, cause of action,
or remedy of any private person against the Respondent, JUST FABULOUS, INC. Similarly,
nothing contained herein shall waive the right of the RESPONDENT to assert lawful defenses in
response to a consumer complaint.
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22.
Upon entry of this AVC, confirmation that all consumer restitution has been resolved and
payment of all funds required by this AVC, the Office of the Attorney General for the State of
Florida agrees to close its civil investigation into the activities of the Respondent, JUST
FABULOUS, INC.
23.
Notwithstanding any other provision of this A VC, the Parties acknowledge that any future
violations of either this AVC or Florida law by the RESPONDENT may subject the
RESPONDENT to additional and unrelated civil penalties and sanctions, as provided by law.
However, this A VC shall not prevent the RESPONDENT from raising any and all defenses to
such alleged violations and related penalties and/or sanctions.
24.
In the event that the Respondent, JUST FABULOUS, INC., violates any of the terms and
conditions of this A VC, it shall pay reasonable attorney's fees and/or investigative costs which
arise from the future violation.
25.
Although the Parties jointly participated in the negotiation of the terms articulated in this
AVC, no provision herein shall be construed for or against either Party on the grounds that any one
Party was more heavily involved in the preparation of the AVC and/or its terms.
26.
The Parties agree that all notices required hereunder shall be sufficient if given as provided
below:
AS TO THE ATTORNEY GENERAL:
Carol E . A. DeGraffenreidt
Assistant Attorney General - Consumer Protection Division
1515 North Flagler Drive # 900
West Palm Beach, FL 33401
Office T elephone Number: (561) 837-5007
Facsimile No.:
(561) 837-5109
Electronic Mail Address: carol.degraffenreidt@ myfloridalegal.com
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AS TO THE RESPONDENTS:
Jeffrey L. Richardson
Mitchell Silberberg & Knupp LLP
11377 West Olympic Boulevard
Los Angeles, CA 90064
Office Telephone Number: (310) 312-3769
Facsimile No.:
(3 10) 231-8370
Electronic Mail Address: [email protected]
VI.
EFFECTIVE DATE
27.
The effective date of this A VC shall be the date of its execution and deli very by the
Department of Legal Affairs. Acceptance by the Department of Legal Affairs shall be established
by the signature of the Division Director of the Consumer Protection Division. The receipt by the
Department of Legal Affairs of any monies pursuant to the A VC does not constitute acceptance by
the Department of Legal Affairs, and any monies received shall be returned to RESPONDENT in
the event that this A VC is not accepted and fully executed by the Department of Legal Affairs.
IN WITNESS WHEREOF, the Respondent, JUST FABULOUS, INC., has caused this
Assurance of Voluntary Compliance to be executed by an authorized representative, as a true act
and deed, in the county and state listed below, as of the date affixed thereon.
SIGNATURES FOLLOW ON SEPARATE PAGES
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JUST FABULOUS, INC.
Agreed to and signed this1--1'1f day
of ~· 2014, by the below-stated person
who stated and affirmed as follows:
BY MY SIGNATURE I hereby affirm that I am acting in my capacity and within my
authority as General Counsel of JUST FABULOUS, INC. and that by my signature I am binding
JUST FABULOUS, INC., to the terms and conditions of this AVC.
By:
)
)
STATE OF CALIFORNIA
COUNTY OF _________
BEFORE ME, this _ _ __ day of _ _ _ __ -----r, 2014, an officer duly authorized
to take acknowledgments in the State of California, pe7. ly appeared MATTHEW FOJUT who
acknowledged before me that he executed the foreg · g instrument for the purposes therein stated .
.7
NOTARY PUBLIC
.·
(print, type or stamp commissioned
name of Notary Public) . /
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Personally known ___ or Produced
Identification
,. (check one)
Type of Identification Produced:
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Jeffrey'L. tRichar~son, Esquire
Mitchell Silberberg & Knupp LLP
11377 West Olympic Boulevard
Los Angeles, CA 90064
Office Telephone Number: (31 0) 312-3769
Facsimile No.:
(310) 231-8370
Electronic Mail Address: [email protected]
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FOR THE ATTORNEY GENERAL'S OFFICE
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Carol E. A. DeGraffenreidt
Assistant Attorney Gen~ral
Office of the Attorney General
Consumer Protection Division
Florida Bar No. 0642101
1515 North Flagler Drive, Suite 900
West Palm Beach, Florida, 33401
Telephone No.: (561) 837-5007
Facsimile No.: (561) 837-5109
Electronic mail: [email protected]
Accepted
this~
day of
~ilf:tfit· J,._,2014
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Ricnard Polk Law~en
D~~ision Director
Consumer Protection Division
Office of the Attorney General
The Capitol, Tallahassee, Florida 32399-1050
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CALIFORNIA ALL-PURPOSE
CERTIFICATE OF ACKNOWLEDGMENT
State of California
County of
On
Los A.ng·e\ e.s '
&vgu~t 'J,\ I ao,~
personally appeared
D0\(llel\e(Heref'aoon,
NotrAf'M Pl!lblic.
inse
me and title of the offi r)
before me,
MG\t-1he..W FO )lAt
who proved to me on the basis of satisfactory evidence to be the person~ whose namees) is/;K'6 subscribed to
the within instrument and acknowledged to me that he/~ey executed the same in hislberfttleir authorized
capacity(id}, and that by his/ll.effttreir signature(s1on the instrument the person,W, or the entity upon behalf of
which the personW"acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph
is true and correct.
WITNESS my hand and official seal.
(Notary Seal)
Signature of Notary Public
ADDITIONAL OPTIONAL INFORMATION
INSTRUCTIONS FOR COMPLETING THIS FORM
DESCRJPTION OF THE ATTACHED DOCUMENT
e(fvrlp )1'a
f\ SSUY'Co\ tlu c5 f If0IUtt t=a ry
(Title or description of attached document)
(Title or description of attached document continued)
Number of Pages
_l_{p Document Date
~/2,) /I Y
(Additional infonnation)
CAPACITY CLAIMED BY THE SIGNER
0 Individual {s)
0 Corporate Officer
(Title)
0
0
0
0
Partner(s)
Attorney-in-Fact
Trustee(s)
Other _ _ _ _ _ _ _ __ _ __
2008 Version CAPA vl2. 10.07 800-873-9865 www.NotaryClasses.com
Any acknowledgment completed In Califorma must contain verbiage exactly as
appears above in the notary section or a separate acknowledgment .form must be
properly completed and attached to that document. The only exception is if a
document Is to be recorded outside of California. In such instances, any alternallve
acknowledgment verbiage as moy be prmted on such a document so long os the
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