The Australian Competition and Consumer Commission (ACCC) has launched separate Federal Court proceedings against two major meal kit delivery services, HelloFresh and Youfoodz. The consumer watchdog alleges the companies, both owned by German parent firm HelloFresh SE, misled customers with confusing subscription practices, trapping over 100,000 people.
Alleged Misleading Conduct and 'Dark Patterns'
The ACCC's case centres on claims that the companies advertised subscriptions as easy to cancel online before a specified cut-off time for the first order. However, the reality was starkly different. Despite cancelling online before the deadline, more than 62,000 HelloFresh customers and nearly 39,500 Youfoodz customers were still charged and received their first box between January 2023 and March 2024.
Consumers found they could only effectively cancel by speaking to a customer service representative, a stark contrast to the simple online sign-up process. ACCC Commissioner Liza Carver described this as a classic example of manipulative 'dark patterns' – design tricks used to influence user behaviour. "We allege that HelloFresh’s and Youfoodz’s conduct involved a suite of confusing and unclear subscription practices," Carver stated.
How Customers Were Allegedly Trapped
The ACCC further alleges that HelloFresh required customers to enter payment details merely to view meal options, assuring them they would not be charged unless they selected meals. However, progressing to the meal selection screens allegedly enrolled them in an ongoing subscription without clear consent. Many were unaware they had signed up until a meal box arrived or a payment notification appeared.
In one cited example, a Youfoodz customer cancelled their subscription minutes after signing up to view the menu. They later received a text confirming a charge and a next-day delivery. Despite requesting a refund, they were allegedly only offered 50% of their money back.
Seeking Penalties and a Regulatory Crackdown
The ACCC is seeking declarations, penalties, compliance orders, and compensation for affected customers. This action aligns with a broader government push to curb unfair trading practices. Assistant Minister for Competition Andrew Leigh has highlighted the issue of 'subscription traps' and 'drip-pricing'.
The Albanese government has vowed to outlaw such manipulative tactics, with consultations set for early 2026 and legislation expected by the year's end. This case follows a precedent where HelloFresh New Zealand was fined $NZ845,000 in October for misleading consumers into reactivating subscriptions.
"Businesses using confusing and complicated subscription cancellation policies is a matter of significant public concern," Commissioner Carver emphasised. "Traders must clearly communicate when consumers are signing up for a subscription, as well as how they are able to cancel and avoid being charged." HelloFresh has been contacted for comment regarding the Australian proceedings.
