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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. Mr. Hutchins started his legal career in Cheyenne, Wyoming as a law clerk for the district court judges. Mr. Hutchins then entered private practice with a Wyoming based litigation and business law firm. 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 municipal law. The State of Wyoming hired Mr. Hutchins from Alaska to represent the State of Wyoming in the national tobacco arbitration and act as its tobacco settlement attorney. While in that position, as a hobby, he developed an enforcement unit for consumer protection for Wyoming residents. Mr. Hutchins moved to Colorado in 2016 and founded Harmony Law, LLC. Harmony Law is primarily engaged in civil litigation. It is also a general practice firm in the areas of business law, estate planning, consumer law and family law. Harmony Law is active in all state and federal courts throughout Wyoming and Colorado.

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