Costco Faces Class-Action Lawsuit Over Membership Auto-Renewal Practices
Issaquah, Sunday, 12 April 2026.
A new class-action lawsuit alleges Costco violated California law by sending membership auto-renewal notices 60 days in advance, missing the legally mandated 15-to-45-day notification window.
The Mechanics of the California Complaint
Filed in the U.S. District Court for the Northern District of California, the lawsuit centers on the specific timeline of Costco Wholesale Corporation’s (NASDAQ: COST) billing practices [4][GPT]. Plaintiff Russel George alleges that the retail giant sent an automated renewal email approximately 60 days before charging his account [4][5]. This timeline places the notification well outside the strict parameters of California’s Automatic Renewal Law, which mandates that businesses notify consumers no less than 15 days and no more than 45 days prior to an annual subscription renewal [1][2][3][4]. The state legislation, which went into effect in July 2025, was specifically designed to enhance consumer transparency and streamline the cancellation of recurring charges [5].
Cancellation Hurdles and Legal Repercussions
Beyond the timing of the notifications, the litigation scrutinizes the physical and digital friction involved in Costco’s cancellation procedures. Currently, the warehouse retailer requires members to either call a toll-free customer service number or physically visit a brick-and-mortar location to terminate their accounts [1][3][4][5]. However, California law stipulates that businesses must allow consumers to cancel their subscriptions using the same method of communication they utilized to enroll, ensuring the exit process is as accessible as the onboarding [1][2][3][4]. State regulations further require companies to maintain straightforward cancellation avenues, such as a dedicated email address or a toll-free number [1][2][3].
The Broader Battle Over Subscription Models
This state-level dispute reflects a broader, highly contested national debate regarding subscription revenue models [GPT]. During the Biden Administration in 2024, the Federal Trade Commission (FTC) attempted to implement sweeping, nationwide “click-to-cancel” regulations [1][2][3][4]. These federal rules would have mandated that businesses make the cancellation of non-physical goods as effortless as the initial enrollment, while also requiring annual reminders and explicit confirmations for renewals [3][4]. However, a federal appeals court struck down the FTC’s regulation in July 2025, ruling that the agency had failed to follow proper procedural steps [1][2][3][4].