The Secret to a ROSCA Violation

From the FTC’s perspective, a certain online business model has become consumer harm.

1. Start with misleading “risk-free” trial offers.
2. If consumers don’t cancel the “risk-free” trial quickly, a hefty, undisclosed fee will be added.
3. cook rice An undisclosed automated shipping program used to send unordered merchandise to consumers.
4. Top has difficult to follow Upselling adds another layer Confused.
5. Charge illegal charges to consumers’ credit or debit cards.
6. Freeze those who try to stop unauthorized shipments and charges.
7. The owner covered it with straw to hide the defendant’s activities.

It’s an unappetizing main dish that leaves consumers feeling sick.oned This is a kind of marketing plan FTC launches challenge again – this time in a Lawsuit filed against Puerto Rico’s Gopalkrishna Pai and eight companies he ownsalleging violations of the Restoring Online Shopper Confidence Act (ROSCA).

this Main ingredients In this case, try online “risk-free” skin care products sold in pairs – Vita Luminance and Regenelift, Derma Vibrance and Nuevoderm, Revived Youth Cream and Revived Youth Serum, Aura Youth Cream and Aura Youth Serum. According to the FTC, the checkout page led consumers to believe that their credit card would only charge $4.95 in shipping and handling fees. Below the large turquoise “Complete Checkout” button there are two small gray lines that say “First, pay $4.95 for S&H today and get a full review of Vita Luminance Cream within fourteen (14) days. We Know you’ll love your smooth, wrinkle-free skin. You’ll receive your product within 5 business days.”

But even there’s something buried underneath already Hard to read fine print: a Tiny “Terms and Conditions” hyperlink. Only by clicking on the obscure link would consumers learn that at the end of the 14- or 15-day trial period, the defendants would charge them the full price of the product—$90 or more—and enroll them in an auto-shipping program Fees are charged periodically until cancellation.

this FTC calls it illegal It doesn’t end there.Defendants exaggerated misleading transactions during checkout, claiming to offer other A “risk-free” trial of the second product promises to “maximize your results,” plus a $4.95 shipping fee. But the second offer came with the same strings attached, the same unauthorized credit card charges and another undisclosed auto-shipping program, according to the FTC.rice.

The defendants stated on their website that consumers could cancel at any time by phone or email, but the FTC said that claim was also unreasonable. Not very reliable – Unreliable.In fact, mAny customer service representative contacted by the consumer only speaks spanish Some of the recorded messages on the defendants’ phones were only in Spanish.Even if consumers can talk to The FTC says as a carrier, people often receive only partial refunds or no refunds at all, and in many cases the onslaught of unordered items continues.

this complain also claimed, In order to obtain the merchant accounts needed to process credit and debit card sales, Defendant Pai used more than 100 false names in an attempt to disguise his business to payment processing entities and banks. A favorite trick: forging an employer’s identification number to hide the fact that he is behind all the accounts. According to the lawsuit, “By doing so, Pai avoided consumer complaints and chargeback disputes related to sales processed through its LLC’s merchant accounts, thereby evading detection by consumers, financial institutions and law enforcement.”

This was not his only attempt to defraud the payment system. According to the complaint, Pai only showed merchant processors “clean” sites that were significantly different from the sites consumers saw. The FTC said the sites were for display only and did not result in product sales.

File a lawsuit in the federal court of Puerto Rico, complain Charged with multiple ROSCA violations.

By now, Internet marketers should be aware of the requirements of ROSCA. The law prohibits online negative selection unless the seller: 1) clearly discloses all material terms of the transaction before obtaining the consumer’s billing information; 2) obtains the consumer’s express informed consent before charging; 3) provides a means to stop duplication Simple mechanism for charging.another thinG Marketers should know about ROSCA: The FTC continues to work to challenge violations.