Costco Hit With Class Action Over Membership Auto-Renewal Notices Under California Law

Costco is facing a proposed class action in federal court in California alleging the retailer failed to follow state rules governing automatic membership renewals, leading to charges that customers say they did not expect.

The lawsuit, filed in the U.S. District Court for the Northern District of California by California resident Russel George, alleges Costco did not provide the legally required notice before renewing his annual membership. Court filings state the company sent a renewal email about 60 days before charging his account, outside the 15 to 45 day window required under California law.

George says his Gold Star membership was automatically renewed in January 2026 for $65, and that he had been reconsidering whether to keep it due to limited use. He says he would have canceled if proper notice had been provided. According to court filings, the renewal notice left out required information, including the renewal terms, the amount to be charged, and clear instructions on how to cancel.

The dispute centers on California’s Automatic Renewal Law, which sets rules for how companies manage recurring subscription charges. It requires businesses to disclose renewal terms, including pricing and cancellation methods, and to send advance notice before charging consumers for a new billing cycle. For annual subscriptions, that notice must be delivered no less than 15 days and no more than 45 days before the renewal date. The law also requires those disclosures to be presented clearly, not hidden in fine print or vague language. Courts reviewing these cases often look at whether a consumer lost a real opportunity to cancel because the required notice was not properly given.

The lawsuit also raises additional claims under California’s False Advertising Law, Consumers Legal Remedies Act, and Unfair Competition Law. These statutes allow consumers to challenge business practices that are alleged to be misleading or unlawful, including failures to provide required information about charges or terms.

Costco allows members to cancel their memberships by phone or in person at its warehouse locations. The filing claims that those options may not meet California requirements, which require businesses to provide cancellation methods that are at least as accessible as enrollment or consistent with how customers typically interact with the business.

Federal regulators attempted to introduce nationwide auto-renewal rules in 2024 that would have required cancellation processes to be as simple as enrollment and mandated annual reminders. A federal appeals court struck down the rule in 2025 on procedural grounds, leaving states to continue enforcing their own standards.

A preliminary hearing in the case is scheduled for June.