The Federal Trade Commission’s has announced that it has halted the operation of a group of San Diego-based Internet marketers alleged to have deceptively advertised free trial offers and enrolled consumers in ongoing continuity plans without obtaining lawful consent. A federal court has froze assets and appointed an temporary receiver.
The complaint states that the defendants market and sell a variety of products online, including skin creams, electronic cigarettes and dietary supplements. The FTC alleges that, advertising through third-party websites, blog posts and surveys, the defendants offered consumers “RISK FREE” trials of products.
The FTC has been quite active in recent years in terms of its enforcing the disclosure and consent requirements set forth in the Restore Online Shoppers’ Confidence Act. Here, according to the Commission, consumers who click on the advertisements are taken to the defendants’ websites, which claim to offer trials of these products for just the cost of shipping. But the complaint alleges that consumers who order the free trial are charged as much as $98.71 for the trial shipment, and are also surreptitiously enrolled in a full price negative-option continuity plan for additional shipments without their consent.
The FTC also alleges the defendants use deceptive order confirmation pages and make cancellation difficult.
The complaint charges the defendants with violating the FTC Act, ROSCA and the Electronic Fund Transfer Act.
Richard B. Newman is a regulatory litigation, investigations and compliance attorney at Hinch Newman LLP focusing on advertising and digital media matters.
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