Federal Court proceedings reveal tens of thousands charged for meal deliveries they tried to cancel, raising concerns about subscription practices
What’s happening: The ACCC has commenced separate Federal Court proceedings against HelloFresh and Youfoodz for allegedly misleading consumers over subscriptions. Both companies, owned by HelloFresh SE, allegedly breached Australian Consumer Law by charging 101,469 customers despite cancellations before specified cut-off times, making cancellation difficult despite promises of easy online account management.
Why this matters: The proceedings signal increased scrutiny on subscription-based business models, with the ACCC seeking compensation orders for affected consumers, penalties, compliance programmes and costs from both companies.
Australia’s meal delivery industry faces court scrutiny as the competition watchdog alleges two major providers trapped thousands of customers in unwanted subscriptions.
The Australian Competition and Consumer Commission has commenced separate proceedings in the Federal Court against home meal delivery providers Grocery Delivery E-Services Australia Pty Ltd, trading as HelloFresh, and Youfoodz Pty Ltd for allegedly misleading consumers over subscriptions.
The ACCC alleges that HelloFresh and Youfoodz, which are both owned by HelloFresh SE, breached the Australian Consumer Law by advertising on their websites and apps that new customers could easily cancel subscriptions through their online account settings as long as they did so before a specified cut-off time.
In fact, when many consumers tried to cancel their subscription online prior to the first delivery cut-off time, they were still charged for and received the first order.
Easy signup difficult exit
Despite being able to sign up easily through the websites and apps, consumers were only able to cancel the first delivery if they spoke with a customer service representative.
HelloFresh allegedly carried out this conduct between 1 January 2023 and 14 March 2025, and Youfoodz between 1 October 2022 and 22 November 2024.
During these periods, 62,061 HelloFresh customers and 39,408 Youfoodz customers were charged a fee despite cancelling their subscription before the specified cut-off time for the first order.
“We’ve brought these two cases because we allege that HelloFresh’s and Youfoodz’s conduct involved a suite of confusing and unclear subscription practices in breach of Australia’s consumer laws,” ACCC Commissioner Luke Woodward said.
“Despite what HelloFresh and Youfoodz represented to new Australian subscribers, tens of thousands of consumers were charged for their first order, even though they cancelled their subscription before the cut-off date.”
Payment before selection
The ACCC also alleges that HelloFresh required consumers to provide payment details to view and select meals from the full menu but represented to them in the sign-up process that they would not be charged unless they selected meals from the menu.
In fact, when consumers clicked the button to progress to the meal selection screens, they were entered into an ongoing subscription and charged for the first delivery.
Many HelloFresh consumers were not even aware that they had been signed up to an ongoing subscription until they received a delivery or payment notification.
“In the case of HelloFresh, many consumers had not even selected meals but were unknowingly subscribed and charged regardless,” Mr Woodward said.
The ACCC also alleges that Youfoodz communicated to consumers who had taken steps to cancel their subscription in their online account settings that the first delivery was cancelled and they would not be charged, when in fact the first delivery could not be cancelled this way and they were still charged.
Over 101,000 affected
In one example, a consumer accessed the HelloFresh website on their phone and entered their payment details to view the menu, but after viewing it, decided not to proceed with a subscription. They did not realise that by saving their payment details, they were already subscribed.
They later received a notification via PayPal that they had been charged and found it difficult to contact HelloFresh regarding the payment at a time when they were experiencing financial distress.
In another case, a consumer signed up for a Youfoodz subscription, which they cancelled online within minutes of viewing the menu. They later received a text stating their delivery would arrive the following day and they had been charged. They called Youfoodz multiple times to request a refund and were eventually offered a 50 per cent refund.
“Traders must clearly communicate when consumers are signing up for a subscription, as well as how they are able to cancel and avoid being charged,” Mr Woodward said.
The ACCC has intensified its focus on consumer protection issues, particularly targeting misleading practices in digital transactions and subscription services as part of its enforcement priorities.
Compensation sought
“Businesses using confusing and complicated subscription cancellation policies is a matter of significant public concern and, where there is evidence of breaches of the Australian Consumer Law and consumer harm, the ACCC will take enforcement action when appropriate,” Mr Woodward said.
“We are also urging consumers who are purchasing gifts this festive season to carefully review the contract terms before paying for any subscriptions.”
Consumer and fair trading issues in the digital economy and in the supermarket and retail sectors are among the ACCC’s current 2025-26 enforcement priorities.
The ACCC is seeking compensation orders for affected consumers, penalties, declarations, publication orders, the implementation of a compliance programme and costs.
HelloFresh and Youfoodz are both owned by the German-based parent company HelloFresh SE. HelloFresh offers weekly meal kits, whereas Youfoodz offers weekly ready-made meals.
The ACCC commenced its investigation into HelloFresh and Youfoodz in October 2024 after receiving a large number of consumer complaints.
Recent ACCC enforcement actions demonstrate the watchdog’s commitment to protecting consumers, with major retailers facing significant consequences for breaching consumer laws.
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Randy Grisby
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