Costco members charged for automatic membership renewals without legally required notice now have a potential class action remedy. A lawsuit filed in March 2026 alleges that Costco violated California’s Automatic Renewal Law by sending renewal notices 60 days before charging customers’ cards, far outside the 15-to-45 day window the law mandates. The plaintiff, California resident Russel George II, saw his Gold Star membership auto-renewed for $65 in January 2026 without the clear disclosure and timely notice required by state law. The case, filed in U.S.
District Court for the Northern District of California, raises critical questions about how the nation’s largest membership warehouse chain handles its annual billing cycle. If successful, members who were charged without proper notice could recover the full renewal amount—California law treats non-compliant automatic charges as unconditional gifts, making them potentially refundable. While no settlement has been proposed yet and the case remains in early stages, members need to understand their rights, what the lawsuit alleges, and what to watch for as the litigation proceeds. The lawsuit alleges Costco violated not only the Automatic Renewal Law but also California’s False Advertising Law, Consumers Legal Remedies Act, and Unfair Competition Law. The core issue is whether Costco’s renewal notifications gave customers enough clear information and enough time to decide whether they actually wanted their membership renewed.
Table of Contents
- What Is California’s Automatic Renewal Law and How Did Costco Allegedly Violate It?
- Who Is the Plaintiff and What Led to This Lawsuit?
- What Are the Other Alleged Legal Violations Beyond the Automatic Renewal Law?
- What Is the Current Status of the Case and When Might There Be a Settlement?
- What Should Members Do Right Now If They Were Charged Without Proper Notice?
- What About the $14 Million Costco Settlement for Promotional Emails?
- How Might This Lawsuit Affect Costco’s Practices Going Forward?
What Is California’s Automatic Renewal Law and How Did Costco Allegedly Violate It?
California’s Automatic Renewal Law sets strict requirements for any company that charges customers’ payment methods for renewals without an explicit transaction-by-transaction authorization. The law requires businesses to (1) clearly disclose the terms of automatic renewal, including the total cost and cancellation procedures; (2) obtain affirmative consent before charging; and (3) send reminder notices to the customer at least 15 days and no more than 45 days before the charge date—not 60 days, and not just days before the actual charge hits. In Russel George’s case, costco sent his renewal email approximately 60 days before the January 2, 2026 charge. This timing alone violates the notice window.
Beyond that, George’s lawsuit claims that Costco’s renewal email did not clearly include the renewal period length, the exact amount to be charged, or explicit cancellation instructions—all required disclosures. The complaint states that the reminder notification was insufficient to meet state law requirements, making it impossible for members to make an informed decision before the money left their accounts. The consequence of this violation is significant: California law can treat such improper charges as unconditional gifts to the consumer. This means the entire $65 (or whatever the membership cost was) could be recoverable through the class action. This differs from federal auto-renewal rules, which the Federal Trade Commission attempted to expand in 2024—a federal appeals court struck down those national rules in July 2025, leaving state laws like California’s as the primary protection for consumers.
Who Is the Plaintiff and What Led to This Lawsuit?
The lawsuit is being prosecuted on behalf of Russel George II, a California resident whose membership was auto-renewed without his informed consent. George’s case illustrates a common scenario: he was charged $65 for a Gold Star annual membership on January 2, 2026, after receiving a renewal notice about two months prior. George states that he had been reconsidering whether to continue his Costco membership due to limited use—meaning that if he had received proper, timely notice with clear cancellation instructions, he may well have declined the renewal. George did not seek out this lawsuit to become rich; rather, his specific case became the vehicle for a class action because his experience appears to be systematic.
Costco’s renewal process, as alleged, seems to be structured in a way that repeatedly violates California law. If his lawsuit succeeds in gaining class certification, thousands of other Costco members—at minimum all California residents charged without proper notice—could become eligible class members. The court has not yet certified a class, meaning the precise definition of who qualifies (membership types, date ranges, geographic scope) will be determined later if the case survives preliminary motions. A preliminary hearing in the case is scheduled for June (2026), which is a critical early checkpoint where the judge will decide whether the case can proceed toward class certification or face dismissal.
What Are the Other Alleged Legal Violations Beyond the Automatic Renewal Law?
The complaint goes beyond a simple Automatic Renewal Law violation. Costco is accused of violating California’s False advertising Law by misrepresenting the terms of renewal and the timing of notifications. George’s lawyers argue that Costco engaged in unfair competition—specifically, charging customers without proper notice gave Costco an unfair business advantage by retaining members who would have canceled if they had received compliant notice. The Consumers Legal Remedies Act claim allows the court to consider whether Costco’s practice was deceptive or unlawful in a way that harmed consumers.
These multiple claims give the plaintiff several legal theories to prove the same underlying harm: unauthorized charges triggered by inadequate notice. If Costco prevails on one claim, these other statutory claims serve as backup avenues for recovery. This multi-theory approach is common in class actions because it increases the likelihood that at least one legal theory will survive motions to dismiss. The significance of these additional claims is that they can support not just refunds but also civil penalties. California’s consumer protection laws can award damages beyond just the membership fees charged, potentially multiplying the liability Costco faces if the case reaches settlement or judgment.
What Is the Current Status of the Case and When Might There Be a Settlement?
As of mid-2026, this lawsuit is in its earliest stages. No class has been certified, no settlement has been proposed or approved, and no claims process is available. The only confirmed upcoming date is the preliminary hearing in June 2026, where the judge will decide whether the case meets basic legal requirements to proceed. This is typically a low bar—the plaintiff just needs to show his claims are not frivolous and that a class of similarly situated people exists. If the case clears the preliminary hearing and eventually reaches class certification, Costco will likely face significant settlement pressure.
Class actions involving membership fees and straightforward damages (the renewal amount charged) tend to settle within 12 to 24 months of class certification because the liability is calculable and the case is strong on liability. However, settlement is never guaranteed—Costco could choose to defend the case vigorously or appeal any adverse rulings. members should not expect a settlement or payout for at least 12 months, and possibly much longer. When and if a settlement does occur, members will typically be notified by email or mail (since Costco already has their contact information). The settlement will specify the claims process, any deadlines, and the amount available for class members. Claims processes for membership refund class actions typically allow members to submit claims with proof of their charge (a credit card statement or Costco account record) and receive a direct payment or account credit.
What Should Members Do Right Now If They Were Charged Without Proper Notice?
Members who believe they were charged for an auto-renewal without adequate notice have no immediate formal action to take—there is no active claims process and no settlement administrator yet appointed. However, keeping documentation is crucial for any future claim. Save any renewal emails from Costco, credit card statements showing the charge, and any communications with Costco customer service about the renewal. These records will be evidence if you need to prove you were charged and did not receive compliant notice. If you are still a Costco member and are concerned about future auto-renewals, you can proactively request that your membership not auto-renew.
Contact Costco directly before your next renewal date to ask for explicit cancellation. Costco must honor affirmative cancellation requests, and having a record (screenshot or email confirmation) of your cancellation request provides evidence of your intent. This does not help with a past charge, but it protects you going forward and creates a record that Costco’s renewal process is not straightforward enough for members to understand without deliberate intervention. Do not delete any emails from Costco about renewals, even if you’ve already been charged. These emails—including the ones that allegedly failed to comply with California law—are exhibits that strengthen a class action. If you receive settlement notice in the future, following the claims instructions and submitting proof of your charge will maximize your recovery.
What About the $14 Million Costco Settlement for Promotional Emails?
Costco is also subject to a separate, distinct class action settlement unrelated to auto-renewal. This $14 million settlement was preliminarily approved on July 2, 2026, and applies to Washington residents who received qualifying promotional emails between June 2, 2021, and July 7, 2026. This settlement is about deceptive advertising in promotional messages, not about auto-renewal practices.
Washington class members eligible for this settlement may be able to claim a direct cash payment. This case demonstrates that Costco has faced multiple lawsuits regarding its customer communication and billing practices—a pattern that lends credibility to the auto-renewal lawsuit’s allegations. The existence of multiple settlements also shows that California and Washington courts have found Costco’s practices problematic enough to sustain legal action.
How Might This Lawsuit Affect Costco’s Practices Going Forward?
If Costco loses this auto-renewal case or settles, the company will likely be forced to overhaul its renewal notice process. At a minimum, a judgment or settlement would require Costco to send renewal notices within the 15-to-45 day window and to include explicit statements of the renewal amount, period, and cancellation methods in those notices. Some settlements also require the defendant to implement new systems that make cancellation easier—for example, allowing members to cancel online or by email, not just by phone or in-person. Beyond Costco, this case is part of a broader trend.
The Federal Trade Commission attempted to create national auto-renewal rules in 2024, but those rules were struck down by a federal appeals court in July 2025. With national rules off the table, state-level class actions like this one have become the primary enforcement mechanism. Costco’s case will likely influence how other major retailers handle auto-renewal for memberships, subscriptions, and recurring charges. If Costco is found liable or forced to settle, that outcome sets a precedent that other membership-based retailers (Amazon Prime, Sam’s Club, appliance warranties, etc.) cannot ignore.
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