FTC Halts Online Subscription Scheme that Deceived People with “Free

The operators of an online subscription scheme agreed to settle a Federal Trade Commission complaint alleging that the defendants duped consumers out of more than $74.5 million by luring them with supposedly “free trial” offers for cosmetics and dietary supplements, then enrolling them in subscriptions and billing them without their consent.

The court orders settling the FTC’s complaint ban the defendants from negative option marketing, in which the absence of affirmative consumer action constitutes consent to be charged for goods or services. The orders require the defendants to get consumers’ consent before billing them. The orders also impose financial judgments, which the FTC may use to send refunds to affected consumers.

“These companies promised free products for only the cost of shipping, but then charged consumers for expensive subscriptions,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue to go after companies that offer supposedly ‘free’ trial offers, but hide the real terms and conditions in the fine print.”

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