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Consumers tricked into paying 2,000% more

Posted by Clyde Hutchins | Aug 14, 2017 | 0 Comments

Consumers tricked into paying 2,000% more

The Federal Trade Commission (FTC) is suing a marketing scheme that tricked consumers into spending 2,000 percent of what they thought they had agreed to pay. The defendants are charged with violating the FTC Act and the Restore Online Shoppers' Confidence Act. In its complaint, the FTC alleges that a group of 78 companies worked together to trick consumers into signing up for auto-shipments and recurring charges. Through various marketing efforts, the consumers were led to "back door" landing pages of various websites offering personal care products. The websites would present "free trial offers" to the consumers. The only charge was a $1.03 shipping charge. When the consumers gave their credit card information to pay for the shipping charge, they were automatically entered into two monthly plans. They were charged a $100 a month from each plan for monthly auto-shipments of products. The charges would continue from month to month until cancelled. The "back door" landing pages did not disclose the auto-shipments or recurring charges as required by law.

The group of companies were involved in various aspects of the operation, including call centers, shipping centers, setting up merchant accounts and operating accounts for payments to affiliate marketers. I write this in the past tense as the FTC obtained a temporary restraining order against the companies.

Some of the business entities were formed in Wyoming and Colorado. The case was filed in Nevada.

About the Author

Clyde Hutchins

Clyde Hutchins is the founder of Harmony Law. Mr. Hutchins started his career as a lawyer in Cheyenne, Wyoming. First gaining experience as a law clerk for the district court judges, Mr. Hutchins entered private practice with a Cheyenne firm focused on civil litigation, business law and some general practice law. Later, Mr. Hutchins went to Alaska, where he was the chief litigator for a firm that engaged in bond law, corporate law, securities law, and the broad reach of municipal law. Mr. Hutchins returned to Cheyenne to represent the State of Wyoming in the national tobacco arbitration. While in that position, he developed the consumer protection unit for the Wyoming Attorney General's Office. He led over 120 investigations and enforcement actions in Wyoming and worked on numerous joint cases with the Federal Trade Commission and other states, including Colorado. Mr. Hutchins relocated to Colorado in 2016 and founded Harmony Law. Mr. Hutchins has established Harmony Law in three principal areas of law. First, it is a general practice firm in the areas of business law, estate planning and family law. Secondly, it is a civil litigation firm, practicing law in state and federal courts throughout Wyoming and Colorado. Finally, it is one of the few firms in Wyoming or Colorado that focuses on consumer protection law.

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