Hunton Retail Law Resource

The Federal Trade Commission entered proposed final orders settling June 2018 charges filed against several online marketers of e-cigarettes, dietary supplements and skin creams for deceptively advertising “risk free” trial offers.

According to the FTC, the defendants advertised the products for the cost of shipping, only to later charge consumers the full prices or enroll them in an expensive ongoing product plan without their consent—a so-called negative option plan. The FTC’s complaints charge the defendants with violating the FTC Act, the Restore Online Shoppers’ Confidence Act, and the Electronic Fund Transfer Act and its implementing Regulation E. The FTC’s orders prohibit the defendants from misrepresenting any material facts about a negative option transaction or the cost of the good or service. In addition to the conduct relief, the settlements include monetary relief in the amounts of a $48.1 million and $123.1 million judgment, respectively, the sums of which will be partially suspended after certain payments and relinquishment of assets by the defendants. The cases were brought with the cooperation of the U.S. Postal Inspection Service, the Nevada Attorney General’s Office and the San Diego County District Attorney’s Office.