Fintech & Ecommerce

FTC Returns $1.1 Million to Consumers After Free Trial Settlement

The US Federal Trade Commission (FTC) is returning $1.1 million to consumers who were misled by deceptive offers of the so-called free trial of products.

FTC Returns $1.1 Million to Consumers After Free Trial Settlement

Source: motionarray.com

The move is the result of an agreement announced in 2018 between the FTC and RevMountain, LLC, Anasazi Management Partners, and 59 other corporate defendants. The relevant information is contained in the press release of the FTC, which was published last Tuesday, April 25.

The FTC sued the defendants in 2017. At that time, the commission stated that it was an illegal practice to charge consumers for offers within the trial version of teeth whiteners and other trial products. Initially, the companies said that the goods would be provided on a different commercial basis.

In its lawsuit, the FTC alleged that the firms informed customers of a small fee for trial products. Consumers then paid for current subscriptions until they were canceled. This practice of commercial interaction did not correspond to the originally stated format. This led to a situation where consumers, believing that their total costs would be only about $5 for a trial product, lost $200 per month as part of the subscription fee without notice.

The FTC sends 41,934 checks to consumers who were defrauded by the defendants. These actions by the commission followed statements published in January by the Consumer Financial Protection Bureau (CFPB) that firms should not fraudulently force customers for subscriptions they do not need. Also, this regulator negatively assessed the practice of applying subscriptions to services with a negative option. This is a model of commercial relations with a client, which is either extended automatically or has an ever-increasing cost.

In January, CFPB director Rohit Chopra said that consumers should not take complicated steps to cancel subscriptions and also they should not worry that a trial marketing offer will become an undesirable monthly expense item. He noted that such practices not only contradict moral principles but also violate the law.

As we have reported earlier, FTC Sues Chargebacks911 and Alleges Use of Unfair Techniques.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.