A children’s online learning program has agreed to pay $10 million to settle Federal Trade Commission charges of illegal marketing and billing practices.

Los Angeles-based Age of Learning Inc. operates a membership-based online learning tool, ABCmouse Early Learning Academy, for children 2-8 years old that provides reading, math and other subjects through its website or mobile app, according to the FTC.

The FTC said the company advertised “special offer” 12-month memberships for $59.95, but did not tell consumers the plans would automatically renew indefinitely, leading them to incur additional charges, the FTC said in its statement Wednesday.

Similarly, it offered consumers enrolled in a 30-day free trial membership the ability to extend their membership beyond the trial period at a cost of $39.95 for 12 months, or $29.95 for six months, but did not disclose they would be charged automatically and indefinitely when the initial period ended, the FTC said. 

The FTC said the company also did not provide consumers with a simple way to stop the automatic renewals despite promising “easy cancellation” at the time of enrollment.

In addition to the $10 million judgment, the proposed settlement order bars the company from making misrepresentations related to “free,” trial,” “sample, “no obligation” or similar plans, when a consumer must take action to avoid future charges.

“ABCmouse didn’t clearly tell parents that their subscriptions would renew automatically, and then the company made it very difficult for them to cancel,” said Andrew Smith, director of the FTC’s Bureau of Consumer Protection. “People are relying more than ever on remote learning and other online services, and companies need to be up-front about automatic renewals and get permission before charging customers.”

FTC Commissioner Rohit Chopra said in a separate statement, “At a time when many parents are looking for more opportunities for educational enrichment online, it is disappointing that services like ABCmouse have scammed millions of dollars form families through dark patterns.

He defined dark patterns as features used to “deceive, steer or manipulate users” into behavior that is profitable for an online service, but harmful to users or contrary to their intent.

The company said in a statement, “This FTC settlement resolves concerns that between 2015 and early 2018 less than 2% of ABCmouse subscribers may not have fully understood that their subscriptions would renew, or how to easily cancel their memberships. Although the vast majority of the families we serve have been highly satisfied, we regret any confusion that any subscriber may have experienced. We enhanced and streamlined our subscription, cancellation, and customer support processes years ago, and we are committed to continuing to provide an exceptional user experience to parents and caregivers.

“We settled this matter to focus on our work of helping educate children,” it said.