Costco Faces Lawsuit Over Auto-Renewal Notices

A class-action lawsuit has been filed against Costco in California, centered on alleged violations of the state's auto-renewal notice laws. The plaintiff, Russel George, asserts that Costco failed to deliver the mandatory renewal warning within the legally prescribed window of 15 to 45 days before his annual membership expired. This alleged oversight, he claims, prevented him from canceling his membership before it automatically renewed.

The legal challenge specifically questions whether Costco adhered to California's requirements for notifying customers about upcoming auto-renewals for its memberships, which range from $65 to $130 annually. The complaint does not dispute Costco's ability to renew memberships but rather its method of providing advance warning.

This case occurs in the wake of a failed federal effort by the FTC to establish nationwide auto-renewal rules, which was struck down by a federal appeals court in July 2025. The court cited procedural issues in the FTC's rulemaking process. The prior federal attempt would have mandated easier cancellation processes and annual reminders for renewals.

Costco's established cancellation policy allows members to end their memberships via a toll-free number or in-store visits. California law, however, requires that cancellation methods be as accessible as the enrollment process and often mandates a toll-free number, email, or other user-friendly options, as stated by the California Attorney General's Office.

A preliminary hearing for George's case against Costco is scheduled for June 2026. This hearing is expected to offer clarity on the court's perspective regarding the notice claims and Costco's cancellation procedures. The ongoing dispute places renewed focus on the critical aspects of timing, disclosure, and compliance with auto-renewal regulations.