Costco Accused of ‘Sneaky’ Amid Explosive Class Action Lawsuit

Costco is facing a fresh legal headache in California after a shopper accused the retail giant of quietly renewing memberships without giving customers the kind of notice the law requires.

Russel George has filed a class action lawsuit against the warehouse chain, claiming Costco renewed his membership without sending a reminder in the proper time window and then made it unnecessarily difficult to cancel once the charge went through. The lawsuit argues that the company’s renewal practices violate California law, which is designed to protect consumers from exactly this kind of surprise billing.

According to the complaint, George did receive a renewal notice, but his lawyers say it arrived too early to count under state rules. California law requires businesses to alert customers between 15 and 45 days before charging them for another subscription term. Because the notice allegedly came outside that window, George says he lost the chance to make an informed decision before Costco took the money.

He claims he does not use the membership enough to justify the yearly fee and would have canceled had he been given proper notice at the right time. Instead, the lawsuit paints a picture of a company benefiting from a system that makes it easier to keep charging people than to let them walk away.

That is where the complaint takes an even sharper turn.

The lawsuit also targets Costco’s cancellation process, arguing that the company does not offer a simple enough way for members to end their subscriptions. Right now, customers who want out reportedly have to either call a toll free number or go to a Costco warehouse in person. But under California law, businesses are supposed to let customers cancel using the same method they used to sign up. So if someone joined online, the lawsuit argues, they should be able to cancel online too without jumping through extra hoops.

Consumer advocates have been sounding the alarm for years over subscription traps, hidden renewals, and cancellation systems that feel deliberately frustrating. George’s lawsuit lands right in the middle of that broader fight, as more Americans grow fed up with companies that make signing up effortless but turning off the payments a chore.

The case also comes after a major setback for federal regulators trying to crack down on these practices nationwide. In 2024, the Federal Trade Commission pushed for so called click to cancel rules that would have forced companies to make cancellations as easy as enrollments. But in July 2025, a federal appeals court blocked the regulation, ruling the agency had not followed proper procedures.

Costco currently offers two membership levels: a standard plan for $65 a year and an executive tier for $130, which includes added perks like cashback rewards, travel discounts, and deals on services such as insurance and vacation packages. Those memberships also unlock access to Costco’s popular bulk pricing, discounted gas, pharmacies, and optical services.

Still, the lawsuit suggests that even a beloved big box brand is not above scrutiny when it comes to consumer rights and automatic charges.

A preliminary hearing in the case is scheduled for June. Costco has not publicly responded to the allegations.