The Federal Trade Commission (FTC) has stopped a group of marketers in California from using allegedly bogus “risk free trial” offers to sell skincare products online. At the Commission’s request, a federal district court has issued a temporary restraining order against the defendants halting their allegedly deceptive marketing practices, freezing their assets, and appointing a receiver over their business.
The agency’s complaint charges seven individuals and 15 companies that sell Auravie, Dellure, LéOR Skincare, and Miracle Face Kit brand products with using deceptive offers to trick consumers into providing their credit or debit card information, and then charging them for the full price of the product and enrolling them in a buying program with recurring fees.
“The sellers of AuraVie tricked people into paying a lot of extra money for skin care products,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Companies need to give clear, honest information about charges. If a company advertises a ‘risk free trial,’ then that’s what it must provide.”
According to the FTC’s complaint, since at least 2010, the defendants have marketed and sold skincare products on a variety of websites, such as aurviefreetrial.com, auraviewtrialkit.com, and mymiraclekit.com. The defendants use pop-up advertisements, banner ads, and advertising space on third-party websites, including Amazon.com, Huffingtonpost.com, and Lowes.com, to tout “risk free trial” offers to direct consumers to their websites, where they are instructed to provide their credit or debit card information to pay shipping fees of $4.95 or less to receive the trial offer.
The FTC alleges that consumers who provide their credit card information soon discover that they have been charged much more – typically $97.88 – under terms hidden in fine print on the defendants’ websites. Consumers also are enrolled without their consent in subscription plans under which they are shipped more products and charged recurring fees. The defendants make it difficult to cancel the memberships, stop or avoid the charges, or obtain a refund.
The FTC alleges the defendants also misrepresented themselves as accredited by the Better Business Bureau with an “A-” rating. In fact, the company is not accredited and has a BBB rating of “F.”
The FTC charged the defendants with violating the FTC Act, the Restore Online Shoppers’ Confidence Act (ROSCA), and the Electronic Funds Transfer Act (EFTA). In filing the complaint, the FTC is seeking a court order permanently barring the defendants from the allegedly illegal conduct and refunds for defrauded consumers.
This matter should be of interest to any company or individual engaging in interactive marketing, including corporate counsel. If you are interested in discussing the design and implementation of preventative compliance controls, or if you are the subject of a regulatory investigation or enforcement proceeding, please contact the author at rnewman@hinchnewman.com.
Richard B. Newman is a leading online marketing compliance lawyer at Hinch Newman LLP specializing in advertising and digital media matters. His practice includes conducting legal compliance reviews of advertising campaigns, representing clients in investigations and enforcement actions brought by the Federal Trade Commission and state Attorneys General, commercial litigation, advising clients on promotional marketing programs, and negotiating and drafting legal agreements.
Information conveyed in this article is provided for informational purposes only and does not constitute, nor should it be relied upon, as legal advice. No person should act or rely on any information in this article without seeking the advice of an attorney.
