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FTC again highlights the importance of "Clear and Conspicuous" disclosure of the material terms

Posted by Clyde Hutchins | Sep 22, 2016 | 0 Comments

The Federal Trade Commission (FTC) yet again took action against a company for failing to clearly and conspicuously disclose the terms of its product offers. NutraClick is involved in marketing nutritional supplements. After receiving thousands of consumer complaints against NutraClick, LLC, the FTC took action against the company to halt its deceptive trade practices.  According to the FTC, consumers were misled by NutraClick's "free trial" offer, and did not realize that they were being signed up for a membership program that charged them up to $80 a month. (I have discussed this marketing technique before.) Additionally, consumers had difficulty in cancelling the membership program.

The FTC alleged that NutraClick violated the FTC Act by failing to adequately disclose the the automatic renewal terms. (I discuss what constitutes "clear and conspicuous" disclosure here.) The FTC also alleged that NutraClick violated the Restore Online Shoppers Confidence Act, a subject I have discussed here before.

The FTC and NutraClick agreed to a stipulated order that prohibits NutraClick from:

  • Obtaining consumer's information without full disclosure of the material terms, any recurring charges, and the cancellation methods;
  • Failing to send written confirmation after the transaction;
  • Charging consumers unless written authorization first obtained; and
  • Failing to provide a simple method of cancellation.

NutraClick also had to pay the FTC $350,000.

About the Author

Clyde Hutchins

Clyde Hutchins is the founder of Harmony Law. Prior to opening Harmony Law, Mr. Hutchins worked in the Wyoming Attorney General's Office for several years where he developed a strong consumer protection enforcement unit. In that position he led over 120 investigations and enforcement actions under the Consumer Protection Act. He worked on numerous joint cases with the Federal Trade Commission and other states, including Colorado, on consumer protection matters. Mr. Hutchins is also a contributing author to Consumer Protection Law Developments, Second Edition. Previous to his work in the Attorney General's Office, Mr. Hutchins was in private practice in Anchorage, Alaska where he was the chief litigator for a firm. Mr. Hutchins represented municipalities on various matters. Mr. Hutchins provided counsel to businesses and investment advisors regarding compliance with securities laws. He was also a bond lawyer and worked on municipal financing matters. Prior to that, Mr. Hutchins practiced civil litigation with a law firm in Cheyenne, Wyoming. Mr. Hutchins devotes his spare time to his family, traveling and enjoying the great outdoors.

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Harmony Law is one of the few law firms in Colorado and Wyoming that focuses on consumer law. Mr. Hutchins is a member of the National Association of Consumer Advocates and state chair for Wyoming. If you have a consumer law issue, please feel free to call 970-488-1857 and speak with Mr. Hutchins.

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