The Federal Trade Commission (FTC) is shutting down a group of online marketing firms that offer consumers deceptive free trials.
A group of San Diego-based internet marketers is accused of misleading consumers. Instead of offering a free trial as promised in their ad campaigns, FTC says, the companies were charging consumers full-price for the trial product and also enrolling them in costly, ongoing continuity programs without getting their approval.
According to FTC, the court decision impacts a variety of products sold online, including beauty creams, electronic cigarettes, and dietary supplements. Product names include “Wrinkle Rewind,” “Erase Repair H/A,” “Pro Vapor,” “Cerebral X,” “Test X Core,” and “Garcinia Clean XT.”
The companies involved in the scam are Triangle Media Corporation, Jasper Rain Marketing LLC, Hardwire Interactive Inc., and Brian Phillips. Through their misleading free-trial advertisements, the companies have made tens of millions of dollars, says FTC.
Consumers who click on the advertisements are forwarded to these companies’ websites, which claim to offer trials of the products for just the cost of shipping, which is normally $4.95 or less. However, the consumers end up paying as much as $98.71, according to FTC. In addition, they are signed up to continuity plans without knowing. As a result, consumers get an additional shipment each month and are charged full price for each shipment.
In addition, the FTC claims these companies trick consumers into ordering additional products by using false order confirmation pages and make it difficult to cancel the continuity plans or get refunds.
The FTC complaint charges these companies with violating the FTC Act, the Restore Online Shoppers’ Confidence Act, and the Electronic Fund Transfer Act and its implementing Regulation E.
A federal district court temporarily stopped the operation of these companies and froze their assets.