When a website prominently advertises “Free!” golf balls and other equipment, both the dumb and the low-handicapper are willing to take the deal. But according to the FTC, the 10 defendants violated the FTC Act and the Restoring Online Shopper Confidence Act by forcing consumers into a corner through inadequately disclosed terms and conditions, deceptive negative options, and misleading upsells. 》.
The defendants marketed golf equipment, kitchen appliances and related subscription services, such as online golf instruction videos, on their websites. But according to the indictment, the defendants used illegal methods to get consumers to subscribe to unwanted subscriptions and charged unauthorized charges to consumers’ credit and debit cards without their explicit approval.
Strategy #1: The defendants apparently claimed that consumers could receive products, such as Tour Z golf balls, “for free.” There is an “Add to Cart” button below it that consumers can click to take advantage of the offer. But according to the Federal Trade Commission, golf isn’t really free. If consumers do not return items within the stipulated time, they will be charged. The lawsuit alleges that the true nature of the “free” offers was not disclosed in a way that consumers could see, read and understand.
The complaint also alleges that the defendants hid important terms, such as the length of the trial period, shipping costs and how much consumers would be charged, in the fine print at the bottom of the first page, surrounded by irrelevant content such as additional product claims. and the defendant’s copyright information. What’s more, these details are located below the “Add to Cart” button, with no visual cues telling consumers to scroll down. When people click “Add to Cart,” all they get is “Additional terms, conditions and restrictions may apply.”
Strategy #2: The FTC also alleges that the defendants offered bundled offers that included a product and an unexplained “free trial offer” for one or more continuity plans. For example, when consumers purchased “Culinary Torch” (Cream Brulee?), the complaint alleges that the defendants signed them up for multiple “free trial” online subscription programs to obtain recipes, coupons, etc. But as with the golf deals, the FTC said the defendants fraudulently concealed the true nature of the plans — which were free for 30 (or 60) days, and then consumers’ credit cards would be charged $9.95 per plan per month until Until they cancel.
Strategy #3: Then there are the upsells. In many cases, after submitting billing information for an initial purchase, consumers must click through as many as 14 upsell pages before reaching the final confirmation page. According to the FTC, defendants concealed the true nature of these offers with dense fine print or obscure hyperlinks that did not clearly explain that consumers would be billed (and were being billed) for these negative options.
If you can’t imagine the defendants’ approach getting any messier, try viewing these sites on your smartphone. The complaint alleges that already confusing transactions are made even more difficult to track on the small screens of mobile devices.
For many consumers, they first realize they are enrolled when they see an unexpected charge appear on their credit card statement with a cryptic description such as “JBEI,” “KAVI,” or “RMC.” Continuity Plan. The FTC said the defendants also failed to make it easier for consumers who wanted to return items, cancel recurring charges or receive refunds. First, the confirmation page does not reveal the name of the seller, how much the consumer will be charged, the fact that the consumer is enrolled in a continuity plan, or the steps to stop monthly charges. The defendants’ refund and return policies are also difficult to find and difficult to follow, the complaint alleges.
The lawsuit alleges that the defendants violated the Federal Trade Commission Act by misrepresenting trial offers, failing to clearly disclose the terms of a negative option, and failing to clearly disclose its return, refund and cancellation policies. The FTC also alleges that the defendants violated the Restoring Online Shopper Confidence Act (ROSCA) by failing to clearly and conspicuously disclose all material terms of a negative option-type transaction before obtaining a consumer’s billing information, and by failing to charge a fee. They were unable to obtain explicit informed consent from consumers and failed to provide a simple mechanism to stop duplication of charges.
If your company offers “free” offers or uses negative options, this is cause for concern. The lawsuit is pending in U.S. federal court against AAFE Products Corp., JBE International, LLC, BSDC, Inc., KADC, Inc., Purestrike, Inc., BNRI Corp., Brian Bernheim, Joshua Bernheim, Jared Coates and Robert Koch. California state.