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Smartwool adds forced arbitration to EULA: Difference between revisions

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Smartwool is a brand of socks.
{{IncidentCargo
|Company=Smartwool
|StartDate=2024-03-29
|EndDate=
|Status=Active
|ProductLine=
|Product=
|ArticleType=Product
|Type=EULA, Terms of Service
|Description=Smartwool is retroactively opting their customers into a EULA in order to add forced arbitration clauses to their clothing.
}}
[[File:Smartwool forced arbitration e-mail.png|thumb|Smartwool email advising consumers of changes to arbitration agreement and process for sending USPS Priority Mail or hand delivery within 30 days.]]
On 29 March 2024, '''[[Smartwool]]''' e-mailed customers in their database, automatically opting them in to their new terms of use. These new terms of use contain a [[forced arbitration]] clause that requires significant effort to opt out of.


==Incident of EULA “roofie-ing”==
==Background==
Smartwool emailed a list of their account holders stating that they were opting them into forced arbitration, and to opt out, they must send a letter. through USPS Priority Mail, which is not the First Class mail that people typically use for mailing letters.
Smartwool is an American clothing company specializing in the sale of wool clothing. The incident described in this article is a example of [[Post-purchase EULA modification|post-purchase EULA (End User License Agreement) modification]] <!-- "(colloquially referred to as "EULA roofieing")" - emphasis colloquially - probably means this isn't Wiki-suitable --> that includes a revised [[Forced arbitration|forced arbitration clause]]. Usually associated with software license agreements, an example of why a clothing company may want to do this is is to avoid paying damages through court if their clothing was defective or harmful.


In addition to the typical loss of rights associated with arbitration, the customers were opted in via email and could simply reply to the email to opt out. According to the so-called "agreement," to opt out, a user must send a letter through USPS Priority Mail, which is not the type of mail that people typically use for a letter. <ref>https://www.youtube.com/watch?v=670rwHz1WV8</ref><ref>https://www.smartwool.com/customer-service/terms-of-use.html</ref>
In the updated terms, opting out of forced arbitration has been made more involved than before.  


[[File:Screenshot from "Forced Arbitration On SOCKS! Purposely Difficult Opt Out Scam Explained".png|thumb|939x939px|Text from the EULA as it appeared.]]
==Post-purchase EULA Modification==
On 29 March 2024, Smartwool e-mailed a list of their account holders stating that they were opting them into [[Forced arbitration|forced arbitration]]<ref>
{{cite web |last=Rossmann |first=Louis |date=2 April 2024 |title=Forced Arbitration On SOCKS! Purposely Difficult Opt Out Scam Explained |url=https://www.youtube.com/watch?v=670rwHz1WV8 |url-status=live |archive-url=https://preservetube.com/watch?v=670rwHz1WV8 |archive-date=9 Feb 2026 |access-date=19 Feb 2025 |website=Youtube}}</ref>, and to opt out, they were required to send a letter "via USPS Priority Mail". Customers could not simply reply to the email to opt out.<ref>
{{cite web
|author=<!--not cited-->
|date=29 March 2024
|title=Smartwool terms of use
|url=https://www.smartwool.com/customer-service/terms-of-use.html
|website=Smartwool
|url-status=live
|archive-url=https://web.archive.org/web/20240404051459/https://www.smartwool.com/customer-service/terms-of-use.html
|archive-date=4 April 2024
|access-date=19 Feb 2025
}}</ref> Priority Mail costs more than First Class mail<ref>
{{cite web |author=<!-- not cited--> |title=Mail & Shipping Services |url=https://www.usps.com/ship/mail-shipping-services.htm |url-status=live |archive-url=https://web.archive.org/web/20250320224509/https://www.usps.com/ship/mail-shipping-services.htm |archive-date=20 Mar 2025 |access-date=19 Feb 2025 |website=USPS.com}}</ref> that someone would commonly use to send such a letter.{{CitationNeeded}} <!-- This section was (re)written by a non-US person that has never used USPS. May be lacking so adding CitationNeeded to be safe -->
 
===Differences Between Pre-purchase and Post-purchase EULA===
The original EULA before the wave of emails<ref>
{{cite web
|author=<!--not cited-->
|title=Smartwool terms of use 2023
|url=https://www.smartwool.com/customer-service/terms-of-use.html
|archive-url=https://web.archive.org/web/20231201234036/https://www.smartwool.com/customer-service/terms-of-use.html
|website=Smartwool
|url-status=dead
|archive-date=1 Dec 2023
|access-date=19 Feb 2025
}}</ref> available on Smartwool's website contained:
#An emphasis on contacting Customer Service first, but does not explicitly make it a prerequisite before arbitration.
#No specification on who determines arbitrability.
#AAA rules apply and outlines fee reimbursement if the claim is under $10,000.
#A specific line reading: "Any dispute or claim relating in any way to the Website and our services, any representations made by us, and/or your use of our websites [...] will be resolved by binding arbitration, rather than in court..." This line does not specify products sold by the company, which would be a likely cause of a class-action lawsuit.
 
The new EULA terms lock down on the existing terms, and contains:
 
#An informal dispute resolution process where the complaining party must send a written notice describing the dispute and allow 30 days for resolution before arbitration can begin.[[File:Smartwool EULA arbitration opt-out.png|thumb|400px|Text from the EULA as it appeared.]]<blockquote>Your opt-out notice must be sent to General Counsel at the address below via USPS Priority Mail or hand delivery within 30 days of receiving this notice, and shall include your name, address, and the same email address you used to create an account with us and an unequivocal statement that you wish to opt out of the updated Terms of Use. Opt-out notices sent via email will not be effective.</blockquote>
#The arbitrator has the authority to determine issues of arbitrability, including scope, validity, and enforceability.
#AAA Consumer Arbitration Rules and Mass Arbitration Supplementary Rules.
#*If AAA is unavailable, parties must agree on another provider.
#*If a claim is deemed frivolous by either Smartwool or the arbitrator, the claimant must reimburse Smartwool for arbitration costs.
#A re-worded line reading: "You and we agree to work together in an effort to resolve any dispute or claim between us relating to these Terms of Use, your account, purchases, or our products (“Dispute”)." This new line specifies 'purchases' and 'products', adding them under the dictation of forced arbitration.
 
==See also==
*[[Click-to-cancel]]
*[[Post-purchase EULA modification]]
*[[Disney wrongful-death lawsuit]]
 
==References==
{{Reflist}}
 
[[Category:Legal Lockout]]
[[Category:Incidents]]
[[Category:Forced arbitration]]
[[Category:Clothing industry]]
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