- Top weight loss app Noom has settled a lawsuit for $62 million to address complaints about its billing.
- The suit alleged Noom misled customers into signing up for low-cost trials that led to costly, hard-to-cancel subscriptions.
- Noom said it will change its practices to make pricing and policies more transparent.
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Noom, the popular weight loss and wellness app, has settled a lawsuit alleging the company misled consumers into signing up for expensive, hard-to-cancel subscriptions.
The company will pay $56 million in cash and $6 million in Noom subscription credits,according to the preliminary settlement document filed February 11.
The class action suit involved eight former customers who alleged that Noom charged them without their consent, in amounts ranging from $45 to $400. Thousands of complaints to the Better Business Bureau reported similar experiences.
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A common complaint was that users signed up for a free or low-cost trial and were told to cancel through a coach, who they said did not respond before the trial expired. As a result, users said they were inadvertently billed for several months to a year's worth of services, Insider previously reported based on documents received through a Freedom of Information Act request.
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A former senior software engineer for Noom was quoted in the suit as saying that canceling Noom was "difficult by design." The design, the engineer said, was meant to generate income from customers who didn't cancel in time to avoid charges.
Noom has revised its billing and subscription practices, pricing disclosures, and customer support, according to a letter from its co-founders,Artem Petakov and Saeju Jeong. The changes include making subscription and pricing details more clear, making it easier to cancel, and increasing customer support, the letter says.
In addition to the auto-renewal and billing complaints, Noom faced criticism from experts and consumers for its weight loss program. While branding itself as different from other diets, the app has previously set very low calorie goals that dietitians say put users at risk of side effects. Experts also say Noom's approach to color-coding food may contribute to disordered thinking around food, or stigmatizing certain foods, Insider previously reported.
Noom has also been under fire from customers and employees for its coaching model. Former employees previously told Insider that, despite advertisem*nts of personalized weight loss support, coaches juggle between 300 up to 800 clients at once, relying heavily on "copy paste" messages.
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