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FTC Charges Online Marketing Scheme with Deceiving Shoppers — “Free” and “risk-free” trials come with hidden charges
“Free” and “risk-free” trials come with hidden charges
The Federal Trade Commission has charged a group of online marketers with deceptively luring consumers with “free” and “risk-free” trials for cooking gadgets, golf equipment, and access to related online subscription services.
According to the FTC, the defendants asked people for their credit card information to cover shipping and handling, and then charged them for products and services without their consent. The FTC’s complaint alleges that Brian Bernheim, Joshua Bernheim, Jared Coates, Robert Koch AAFE Products Corp., JBE International LLC, BSDC Inc., KADC Inc., Purestrike Inc., and BNRI Corp., formerly known as Bernheim and Rice Inc., violated the FTC Act and the Restore Online Shoppers’ Confidence Act.
According to the complaint, the defendants’ websites, TV infomercials and email deceived consumers by prominently claiming that their products and services were free, without clearly disclosing that they would start charging consumers if they did not cancel their “free trial” or return the “free” products. They also misrepresented their return, refund and cancellation policies. Specifically, they buried these terms in pages of fine print that people could reach only through a tiny hyperlink.
During the purchase process, the defendants signed consumers up for more “free” trials after forcing them to click through as many as 14 upsell pages to reach a final confirmation page. According to the complaint, many of those pages included poorly disclosed, or undisclosed, additional “free trials” that resulted in yet more unauthorized charges.
The defendants marketed their products under various company names, including Kitchen Advance, Gourmet Cooking Online, Gourmet Cooking Rewards, Medicus Golf, Kick X Tour Z Golf Balls, Golf Online Academy, Golf Tour Partners and Purestrike Swing Clinic.
The Commission vote authorizing the staff to file the complaint was 2-0. It was filed in the U.S. District Court for the Southern District of California.
NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.