Online Marketing Scheme Tricked Consumers into Enrolling in Expensive Subscription Services
Some consumers got emails inviting them to fill out surveys falsely claiming to be for well-known merchants like Kohl's and Amazon
The Federal Trade Commission (FTC) has charged an online marketing operation with deceptively luring people into an expensive negative option scam using an initial low-cost ($1.03, plus shipping and handling) "trial" offer for tooth whiteners and other products.
Luring COnsumers in
According to the FTC, the defendants used a network of 78 companies, at least 87 websites, and dozens of bank accounts to hide their ownership and launder the profits from the scheme. They also drove people to their websites via affiliate networks that generate web traffic with blog posts, banner ads, and surveys.
For example, some consumers got emails inviting them to fill out surveys falsely claiming to be for well-known merchants such as Kohl's and Amazon, and were directed to the defendants' websites to claim a "reward" for completing the survey.
The FTC alleges that—by using deceptive claims, hidden fine-print disclosures, and confusing terms—the defendants tricked consumers into providing their billing information and then started charging them about $100 a month unless the consumers canceled within 8 days.
They also used an order confirmation page to trick consumers into signing up for a second monthly subscription, which cost an additional $100, for an identical product.
Because of this double-deception, the FTC says that the defendants charged consumers, who reasonably believed they had agreed to a single shipment for $1.03 plus shipping costs, about $200 a month until they canceled both unauthorized subscriptions.
The defendants are charged with violating the FTC Act and the Restore Online Shoppers' Confidence Act.
The defendants in this case are Blair McNea, Danielle Foss, Jennifer Johnson, Boulder Creek Internet Solutions Inc., Walnut Street Marketing Inc., and the following LLCs: Anasazi Management Partners, RevMountain, Wave Rock, Juniper Solutions, Jasper Woods, Wheeler Peak Marketing, ROIRunner, Cherry Blitz, Flat Iron Avenue, Absolutely Working, Three Lakes, Bridge Ford, How and Why, Spruce River, TrimXT, Elation White, IvoryPro, Doing What's Possible, RevGuard, RevLive!, Blue Rocket Brands, Convertis, Convertis Marketing, Turtle Mountains, Boulder Black Diamond, Mint House, Thunder Avenue, University & Folsom, Snow Sale, Brand Force, Wild Farms, Salamonie River, Indigo Systems, Night Watch Group, Newport Crossing, Greenville Creek, Brookville Lane, Honey Lake, Condor Canyon, Brass Triangle, Solid Ice, Sandstone Beach, Desert Gecko, Blizzardwhite, Action Pro White, First Class Whitening, Spark Whitening, Titanwhite, Dental Pro At Home, Smile Pro Direct, Circle of Youth Skincare, DermaGlam, Sedona Beauty Secrets, Bella at Home, SkinnyIQ, Body Tropical, and RoadRunner B2C (also doing business as RevGo).