FTC halts deceptive online 'free trial' offers

BY LEAH WILLIAMS
Posted on AUG 05, 2019

The Federal Trade Commission receives court-appointed authority to charge internet marketers in violation of dishonest online continuity plans.

A federal district court has granted the Federal Trade Commission's appeal to obstruct a group of San Diego-based Internet marketers from deceptively advertising free trial offers and consumer enrollment inexpensive continuity plans without their knowledge or consent.

The court order announced today temporarily impedes the operation, freezes its assets, and appoints a temporary receiver over the business.
According to the FTC's complaint, consumers who click on these advertisements are taken to the defendants' websites, which, the complaint alleges, claim to offer trials of these products for just the cost of shipping, typically $4.95 or less. The complaint states, however, that consumers who order the free trial wind up being charged as much as $98.71 for the trial shipment, and are also enrolled in a negative-option continuity plan without their consent under which they receive an additional shipment each month and are charged full price for each shipment.

In addition, the FTC alleges the defendants use deceptive order confirmation pages to trick consumers into ordering additional products, for which the defendants similarly charge consumers full price and enroll them in negative-option plans. The defendants then make it difficult to cancel the continuity plan, stop or avoid the recurring charges, or obtain a refund.

The complaint charges the defendants with violating the FTC Act, the Restore Online Shoppers' Confidence Act, and the Electronic Fund Transfer Act and its implementing Regulation E. The FTC is seeking an injunction permanently barring the defendants from such practices in the future